American Airlines swings to a loss as jet fuel costs erase record revenue

American Airlines Group reported a third-quarter net loss on Oct. 22, even as revenue rose to a record for the period, after a sustained run-up in jet fuel prices overwhelmed what the company called the strongest year-over-year revenue growth in years. According to the carrier's third-quarter earnings release filed with securities regulators, fuel alone added $1.9 billion in costs compared with a year earlier, turning what otherwise would have been a profitable quarter into a loss.

The Fort Worth-based airline, the largest in the world by fleet size, posted a GAAP net loss of $269 million, or 41 cents per diluted share, compared with a $114 million loss a year earlier. Excluding special items, the adjusted net loss was $182 million, or 28 cents per share — only $71 million worse than the equivalent quarter of 2025, the company said, despite the much larger fuel hit.

The numbers behind the loss

Total operating revenue reached $16.3 billion, up 19.3% from the third quarter of 2025 and above the high end of the guidance American had given in July, according to its quarterly report filed with the Securities and Exchange Commission. Premium-cabin revenue climbed 22.9% and Main Cabin revenue rose 19.5%, while revenue from managed corporate travel accounts — a closely watched gauge of business-travel demand — increased 27.6%. AAdvantage loyalty-program enrollments were up 27.4%.

Fuel expense told a different story. Aircraft fuel and related taxes totaled $4.635 billion, up 67.5% from a year earlier, driven by an average price of $3.85 a gallon, 62.7% higher than in the third quarter of 2025. The airline said it held no fuel-hedging contracts as of Sept. 30. Operating income fell 23.4% to $115 million, for an operating margin of just 0.7%. Load factor — the share of seats filled — slipped 2.6 points to 83.4%, even as yield, the average fare paid per mile, rose 18.3%.

A fuel spike hitting the whole industry

The pressure has built all year. Nine-month fuel expense reached $12.4 billion, up 55.2% from the same period of 2025, and the nine-month GAAP net loss stands at $580 million, or 88 cents per share, with an adjusted nine-month loss of $350 million, or 53 cents per share. American is not alone: the carrier and its network peers have repeatedly cut profit guidance this year as jet fuel prices climbed, a trend tied in earlier company and analyst commentary to supply disruptions tied to Middle East conflict. American ended the quarter with $11.8 billion in total available liquidity and $28.1 billion in net debt.

On the earnings call, Chief Financial Officer Devon May said the airline "paid $3.85 per gallon" in the quarter, about $1.48 more than a year earlier, and warned that "for the full year, we now expect fuel expense to be more than $7 billion higher than in 2025," according to a transcript of the call. The company's investor presentation filed alongside the release shows the airline is still targeting nearly $1 billion in annual run-rate cost savings and more than $900 million in working-capital improvements by the end of 2026, and says its cost performance, excluding fuel and special items, remains the best among network carriers even after a 3% increase.

Reaction and who it affects

Chief Executive Robert Isom framed the quarter as a demand story undone by fuel. "We produced a loss in the quarter that, but for this fuel spike, would have been solidly profitable," he told analysts on the call.

"Unfortunately, the significant increase in fuel prices more than offset that strength," Isom said of the carrier's revenue growth.

The result lands hardest on American's shareholders and on travelers watching fares, since airlines facing margin pressure from fuel costs have historically been slower to discount. The Associated Press reported that the adjusted loss matched the average estimate of eight analysts surveyed by Zacks Investment Research, and that American's shares are down about 20% so far this year, though off only about 1% over the past 12 months. Employees with a stake in the company's profit-sharing plan are also affected, since American's profit-sharing payouts are tied to annual earnings that are now expected to come in negative for a second straight year.

What's next

American widened its outlook for the rest of the year. It now expects a fourth-quarter adjusted loss of 50 cents to $1.10 per share and a full-year adjusted loss of $1.00 to $1.60 per share, even as it projects fourth-quarter revenue growth of 19.5% to 22.5% and warns that fuel will average roughly $4.70 a gallon in the final quarter — nearly double the year-earlier level and worth about $2.8 billion in added cost. Isom told analysts the carrier's "bias in terms of capacity is to the downside" heading into 2027, saying growth will "decelerate considerably" as the airline shifts from adding flights to protecting margins. He added that the company still believes it "can be profitable next year" if fuel prices stabilize. American's next scheduled report, covering the fourth quarter and full year 2026, is expected in late January 2027.