American Airlines and Ryanair are navigating higher fuel costs in fundamentally different ways, according to their latest earnings. American Airlines posted record quarterly revenue of $16.7 billion, up 16.3% year over year, with premium passenger unit revenue rising 13.4%, but fuel expense surged 83% to $4.88 billion. Ryanair, meanwhile, has hedged approximately 80% of its fuel requirements through March 2027 at $67 per barrel and an additional 15% of next year’s requirements at $85 per barrel, even as fares fell 6% during the quarter. The analysis suggests that if fuel prices remain elevated, Ryanair’s structurally lower cost base and extensive hedging may provide a more durable competitive advantage than American’s reliance on pricing power.
