Air China Ltd Class A601111
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High aviation fuel prices due to Middle East geopolitical conflicts squeeze profit margins, causing operating loss.
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American Airlines CEO Warns High Jet Fuel Prices Could Force More Flight Cuts
American Airlines CEO Robert Isom warned that sustained high jet fuel prices will require adjustments to the carrier's capacity planning, speaking at the annual Morgan Stanley Laguna Conference in California on Sept. 16. Jet fuel averaged $4.53 per gallon for the week ending Sept. 18, a nearly 80% increase from the national average a year ago, driven by the war in Iran and the closure of the Strait of Hormuz following the U.S.-Israeli strike on Iran at the end of February 2026. American Airlines has already suspended routes at Los Angeles International Airport from cities including Cleveland and Pittsburgh and cancelled several high-profile routes to Middle Eastern cities, and Isom said more cancellations could follow if prices stay at current levels for months. Isom said he still expects American's third-quarter revenue to rise between 16% and 19% when earnings are reported later in October, noting that 30% of the airline's high-fare seats generated 50% of its total revenue in recent months. United Airlines CFO Michael Leskinen and Southwest Airlines CFO Tom Doxey echoed the concerns at the same investor gathering, with Leskinen saying the airline is flying to maximize profitability and free cash generation rather than market share, and Doxey saying trimming capacity is a natural response if fuel stays higher for longer. Consumer Price Index data showed the average flight within the U.S. sold in June, July, and August cost 25% more than during the same months in 2025.
FTAI Aviation Authorizes US$500 Million Cash-Funded Share Buyback Through 2029
FTAI Aviation Ltd. announced a share repurchase program authorizing the buyback of up to US$500,000,000 of its shares, funded from existing cash and running until the earlier of completion or September 30, 2029. The sizable, cash-funded authorization adds a parallel use of cash alongside the company's asset-light growth push, which centers on off-balance-sheet Strategic Capital vehicles. That catalyst was recently reinforced by a US$2,000,000,000 warehouse financing for the second Strategic Capital vehicle. FTAI Aviation's narrative projects $9.0 billion in revenue and $2.4 billion in earnings by 2029, yielding a $369.00 fair value, while the most bearish analysts assume about US$5.8 billion of revenue and US$1.5 billion of earnings by 2029. Investors weighing the buyback must also consider the core risk of concentrated exposure to legacy engines.
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S&P 500 Q3 Earnings Expected to Rise 24%, Eighth Straight Double-Digit Quarter
S&P 500 earnings are expected to increase by +24% from the same period last year in the third quarter, the 8th straight quarter of double-digit earnings growth for the index, according to Zacks Investment Research. Earnings are expected to be above the year-earlier level for 14 of the 16 Zacks sectors, with 5 sectors expected to enjoy double-digit growth: Aerospace up +159.3%, Energy up +111.9%, Tech up +41.9%, Basic Materials up +31.2%, and Transportation up +15.1%. The Conglomerates sector is the only one expected to have lower earnings in Q3 relative to the same period last year, down 35.4%, while Consumer Staples earnings are expected to be flat. Excluding the Energy sector, Q3 earnings growth for the S&P 500 drops to +20% from +24%, and excluding the Tech sector, growth for the rest of the index drops to +14.4%. Nvidia's Q3 earnings are expected to increase +90% year-over-year on +91.2% higher revenues, while Micron's year-over-year earnings and revenue growth rates are expected to be +938% and +348.6%, respectively, and Tech sector earnings growth gets cut by slightly more than half once contributions from Nvidia and Micron are excluded. The Q3 earnings season will get the spotlight when the big banks report on October 13th, but the reporting cycle actually got underway with the September 10th quarterly releases from Oracle and Adobe, followed by homebuilder Lennar as the third S&P 500 member to report such Q3 results, with an additional six index members on deck this week including Costco, AutoZone and Darden. Total Q3 earnings for the three S&P 500 members that have reported results already are up +22.6% from the same period last year on +14.9% higher revenues, with 33.3% beating EPS estimates and 66.7% besting revenue estimates.