American Airlines Group

American Airlines, United Airlines and Southwest Airlines are cutting their least-profitable routes as jet fuel prices climb to $4.71 per gallon, more than double the cost a year ago and near a 20-year high. Speaking at Morgan Stanley's annual Laguna Conference on Sept. 16, American CFO Devon May said the fuel spike has added $1 billion to the carrier's projected fourth-quarter expenses, prompting it to cut some December flights and plan for less growth next year. Southwest CFO Tom Doxey said the airline halved its planned 2-3% flight capacity growth "because fuel has been higher," while United CFO Mike Leskinen said United will fly fewer flights in December and could cut further next year, noting that 35% of its fourth-quarter tickets were already booked but that higher fuel costs get passed through to consumers with a lag. United and American declined to share the number of flights they cut, and a Southwest spokesperson told Fortune its schedule adjustments were "very minimal" and do not affect large-scale exits of routes or airports. United and American spent about $8.2 billion and $7.8 billion respectively on fuel in the first six months of this year, both up almost 49% from a year earlier, while Southwest spent nearly $3.6 billion, up about 39%; fares were 23.4% higher in August than a year earlier, compared to a 3.4% increase in overall consumer prices. The fuel shock has also hit Europe, where Ryanair cut its full-year passenger forecast this month from 216 million to 214 million.

A 40% spike in oil futures since the beginning of August has put fuel costs back in focus for the airline and cruise industries, with oil futures challenging $110 per barrel. Within the cruise industry, Carnival is the most vulnerable because it buys fuel at current spot-market prices rather than using hedges, and an industry study finds a 10% increase in fuel costs per metric ton can lower Carnival's annual net income by as much as $140M. Royal Caribbean employs the most efficient hedging strategy, with as much as 60% of its fuel needs locked in at below-market prices, so the same 10% increase costs it roughly $50M annually in net income, while Viking Holdings is the least exposed on a fuel consumption basis thanks to its smaller fleet and higher-income, relatively inelastic customer base. In the airline industry, fuel hedges have cushioned some larger European carriers, but legacy U.S. carriers have abandoned the strategy altogether; Delta Air Lines has its own oil refinery in Pennsylvania, while American Airlines and United Airlines stopped hedging to capitalize on lower fuel prices prior to February 2026, leaving them vulnerable. According to Bloomberg research, every one-cent increase in the price of a gallon of jet fuel raises American's annual operating expenses by about $46M and United's by $40M annually, and since the start of August the oil spike has translated into an 18% drop in United's share price, 24% for American, and 16% for Delta.

Ryanair, one of Europe's largest low-cost airlines, warns that airfares will keep rising if jet fuel prices remain high into 2027, and that some carriers may struggle to survive. The warning follows an escalation in the U.S.-Iran war, which has heightened fears of supply disruptions in the Strait of Hormuz, a key route for about one-fifth of the world's seaborne jet fuel trade. Jet fuel prices have neared $140 a barrel, and the global average jet fuel price is 74.2% higher than last year's average, according to IATA. Ryanair, which has hedged about 80% of its fuel costs at $67 a barrel, is cutting winter traffic targets by about 2 million passengers to reduce exposure to unhedged fuel. Unhedged U.S. carriers like American, United, and Delta each face about $400 million in additional monthly fuel costs, according to DWU Consulting, and may raise ticket prices or cut routes. Travelers are advised to book sooner rather than later, consider hedged airlines for international trips, and avoid basic economy tickets to maintain flexibility.

American Airlines Group Inc. announced on August 18, 2026, that it will add seatback screens to more than 800 narrowbody jets and boost premium seating to about 40% of narrowbody capacity from roughly 25%, reversing a nearly decade-old decision to strip screens from its planes. The move is a direct attempt to close a profit gap with rivals: American reported second-quarter profit of just $71 million, compared with $805 million at United and $1.6 billion at Delta Air Lines Inc. The airline also reported a record 16.3% jump in second-quarter revenue, with premium unit revenue up 13.4% and managed corporate revenue up 26%, but fuel costs rose $2.2 billion, or 83%, wiping out much of the gain. CEO Robert Isom called the gap "meaningful" in a memo to staff while reshuffling senior leadership. New screens won't start going in until 2028, with full completion not expected until the early 2030s. Delta, which never removed its screens, affirmed full-year earnings guidance of $6.50 to $7.50 a share even after absorbing its highest-ever quarterly fuel bill.

American Airlines (NASDAQ:AAL) is down 30.5% over five years, while Delta and United have each gained over 100%, leaving American's market cap at roughly $9.2 billion versus Delta's $54.6 billion. Despite absorbing the same fuel shock, Delta delivered a 9% operating margin while American's collapsed to under 3%, with full-year 2026 adjusted EPS guidance reset to a loss of $0.65 to a profit of $0.65. American rejected United's 2026 merger bid on antitrust grounds, leaving CEO Robert Isom to close the unit revenue gap through fleet upgrades and premium cabin expansion alone. The company's debt has been cut from about $54 billion at the pandemic peak to roughly $35 billion, though shareholder equity remains negative at $3.972 billion.

Delta Air Lines and United Airlines are restoring more service to Israel, signaling growing confidence in a market that U.S. carriers have repeatedly pulled back from due to security concerns. Delta will restart daily New York-to-Tel Aviv flights on September 6, while United is adding San Francisco service next spring. Delta's restart is measured: its Atlanta-Tel Aviv service remains suspended until December 18, and Boston service until further notice. United plans three weekly flights between San Francisco and Tel Aviv beginning March 28, adding to its existing service from Newark, Chicago, and Washington Dulles. American Airlines, in contrast, has its Israel flights suspended through March 27, 2027, leaving Delta and United with less direct competition. For investors, Israel itself is unlikely to materially change either airline's overall earnings, but restoring service matters because long-haul international and premium travel are important revenue sources, and limited capacity can support pricing if demand remains resilient.

American Airlines reported record second-quarter revenue of $16.7 billion, up 16.3% year over year, driven by broad-based demand across premium, corporate, domestic, and international travel. However, fuel expense surged 83% to $4.88 billion, largely offsetting those gains and highlighting the key risk to profitability. Management expects an additional $1.7 billion in year-over-year fuel expense in the third quarter and guided to an adjusted loss per diluted share of $0.70 to $0.10 for the period, while full-year guidance ranges from a loss of $0.65 to a profit of $0.65 per share. The airline was able to recover roughly half of the fuel cost increase through stronger pricing, but the outlook remains uncertain as fuel volatility persists.

U.S. airlines are slashing earnings forecasts after renewed Middle East hostilities pushed jet fuel costs sharply higher. Southwest Airlines reported a $900 million year-over-year jump in second-quarter fuel expenses, a $1.17 headwind to adjusted earnings per share, and cut its full-year 2026 adjusted EPS guidance to a range of $3.25 to $4.25 from at least $4.00. American Airlines saw fuel expense surge over $2.2 billion, or 83%, and now expects full-year adjusted diluted EPS between a loss of $0.65 and earnings of $0.65, with a third-quarter loss of $0.10 to $0.70 per share. United Airlines anticipates nearly $6 billion in added fuel expense for full-year 2026 and reported a $2.3 billion, or 84%, jump in second-quarter fuel costs. The spike follows the collapse of a U.S.-Iran memorandum of understanding and a ceasefire, which reignited crude and fuel price rallies, while record U.S. fuel exports and tight global markets add further pressure.

American Airlines Group shares tumbled after the carrier warned that surging jet fuel prices are eroding profitability, overshadowing a stronger-than-expected second-quarter earnings report. The airline reported record quarterly revenue of $16.7 billion, up 16.3% year-over-year, and adjusted earnings of $0.15 per share, beating Wall Street estimates, but net income fell sharply to $71 million from $599 million a year earlier as fuel expenses jumped more than $2.2 billion, or 83% year-over-year. Management now expects full-year adjusted earnings ranging from a loss of $0.65 per share to a profit of $0.65, a significant reduction from its prior outlook, and third-quarter adjusted EPS between a loss of $0.70 and $0.10. The stock fell 8.4% on July 23, extending its year-to-date decline to 5.6%, though it remains up 26.3% over the past 52 weeks. Analysts have a consensus Moderate Buy rating on the stock, with an average price target of $19.77, but Citigroup lowered its target to $19 from $22 and Melius Research downgraded the shares to Hold from Buy.

Lockheed Martin and American Airlines reported earnings the same day this week, revealing how the ongoing war involving Iran is creating clear winners and losers. Lockheed Martin raised its full-year sales guidance to a range of $79.75 billion to $81.75 billion and profit guidance to $29.95 to $30.65 a share, both beating Wall Street expectations, while its missile sales jumped about 20% to $4.1 billion and its order backlog hit a record $230.4 billion. American Airlines cut its 2026 earnings outlook to a range of a loss of 65 cents to a profit of 65 cents a share, worse than its prior forecast, as jet fuel costs surged 83% in the second quarter and fare increases covered only about half of the added fuel expense. Lockheed Martin's stock jumped as much as 10% on the news, while American Airlines shares fell about 8%. Hedge fund data showed that 83 funds held Lockheed Martin at the end of the first quarter of 2026, up from 59 the prior quarter, while American Airlines was held by just 42 funds, down from 49.

Tesla, Alphabet, and American Airlines were among the biggest stock losers on Thursday as investors reacted to a wave of technology earnings and escalating geopolitical tensions. Tesla shares fell 12% after the EV maker missed Q2 earnings expectations, with EPS of $0.33, an operating margin of 1.4%, and negative free cash flow of $1.1 billion overshadowing record quarterly revenue growth of 26% year-over-year. Alphabet dropped 6% as surging AI spending and higher capital expenditure guidance outweighed a strong Q2 earnings beat, with revenue climbing 25% to $119.8 billion but adjusted EPS missing estimates and free cash flow turning negative by $5.9 billion. American Airlines declined 7% despite a Q2 earnings beat after cutting its full-year profit outlook and issuing weaker-than-expected Q3 guidance, citing an 83% surge in fuel costs that is expected to drive a quarterly loss of $0.10 to $0.70 per share. On the gaining side, Hyliion surged 14% after securing a $41.7 million U.S. Navy contract, United Rentals jumped 13% on record revenue of $4.41 billion and raised guidance, Lockheed Martin rallied 11% after beating estimates and lifting its outlook on $65 billion in new orders, RTX gained 8% on strong demand and a record backlog of $289 billion, and ServiceNow rose 5% after beating estimates and highlighting ninefold growth in AI agent deployments.

Lockheed Martin is the clear favorite over American Airlines heading into their simultaneous second-quarter earnings reports on Thursday, July 23, 2026, according to a 24/7 Wall St. analysis. Lockheed Martin's diluted EPS guidance of $29.35 to $30.25 for fiscal 2026, a record $194 billion backlog, and 23 consecutive years of dividend increases contrast sharply with American Airlines' adjusted EPS guidance ranging from a loss of $0.40 to a profit of $1.10, $34.7 billion in total debt, and negative equity. Analyst consensus rates Lockheed Martin a Hold with a $606.68 price target, implying significant upside from its $507.09 close, while American Airlines lacks a clean forward earnings multiple and carries bearish social sentiment. Prediction market data gives Lockheed Martin a 57% chance of beating Q2 estimates and a 97.1% probability that its backlog stays above $170 billion. The analysis concludes that Lockheed Martin suits retirement-focused portfolios, whereas American Airlines remains a speculative bet tied to fuel costs and the airline cycle.

Zacks Investment Research added three stocks to its Zacks Rank #5 (Strong Sell) list today. Albemarle, a specialty chemicals company, saw its current-year earnings consensus estimate revised 29.1% downward over the last 60 days. American Airlines, a network air carrier, had its estimate cut by 22.1%. Aquestive Therapeutics, a specialty pharmaceutical company, experienced a nearly 16.7% downward revision.

Delta Air Lines spent more than $4 billion on fuel in the second quarter as the war in Iran sent energy prices soaring. The airline's wholly owned oil refinery in Trainer, Pennsylvania, helped recoup some of those costs, with its performance surging 83% to bring year-to-date revenue to $2.09 billion, essentially offsetting $0.11 per gallon of jet fuel cost. Jet fuel is typically one of the largest operating expenses for airlines, and US Gulf Coast jet fuel swaps remain roughly 60% above where they started the year. Delta recognized a $2 billion increase in fuel expenses for the quarter compared to the same period a year ago. The refinery, purchased from ConocoPhillips in 2012, provides Delta with 200,000 barrels per day of jet fuel through in-house production or swaps, approximately 75% of its consumption, and has served as a hedge against oil price spikes.

American Airlines Group shares are under fresh pressure after a spike in crude oil prices driven by renewed Middle East tensions, with the stock declining 5% amid a broader airline selloff. The carrier, trading around $16.51, carries high debt and negative shareholder equity, making it especially vulnerable to higher fuel costs that squeeze already thin margins. Recent index removals from several Russell value benchmarks may reduce passive ownership and amplify price swings, while insider selling and mixed analyst views signal limited risk tolerance. Investors are watching for updated guidance on unit costs and margins, as well as any capacity or route adjustments, ahead of the next earnings report.

American Airlines and United Airlines shares fell sharply after oil prices soared when President Trump declared the Iran ceasefire over and threatened more strikes. American Airlines dropped 5.3% and United Airlines fell 3.9% as West Texas Intermediate crude surged 7.1% to $75.41 a barrel. Jet fuel is a critical expense for airlines, and higher crude directly increases cost per available seat mile, while renewed Middle East hostilities also raise risks of airspace closures and weaker consumer travel demand.

Wall Street analysts issued a flurry of ratings changes on Tuesday, July 7, 2026. Bank of America downgraded Adobe to Underperform from Buy with a $190 target, while Erste Group cut Broadcom to Hold from Buy. Meta Platforms was upgraded to Buy from Hold at Erste Group, and Shopify was reinstated with a Buy rating at Bank of America with a $150 target. Space Exploration Technologies, which recently completed a massive IPO and joins the Nasdaq-100 today, drew Buy initiations from Goldman Sachs at $205, UBS at $210, and Stifel at $190. Other notable moves include Cloudflare upgraded to Outperform at Scotiabank, First Solar raised to Buy at Deutsche Bank, and American Airlines downgraded to Hold at Melius Research.