High fuel costs erode profitability American Airlines (AAL.US)'s Q2 performance exceeded expectations but lowered its full-year profit guidance again

The Zhitong Finance App learned that due to continued high fuel prices due to the Middle East war, American Airlines (AAL.US) lowered its 2026 profit guidelines for the second time this year, further hampering the American airline's efforts to narrow the performance gap with its two major competitors. As of press release, American Airlines's US stocks fell more than 4% before the market on Thursday

According to financial reports, American Airlines' second-quarter revenue reached 16.74 billion US dollars, up 16.3% year on year, which is basically in line with analysts' expectations; adjusted net profit was 99 million US dollars; adjusted earnings per share were 15 cents, far lower than 95 cents in the same period last year, but higher than analysts' expectations of 2.7 cents. The company's fuel costs increased by more than $2.2 billion in the second quarter, up 83% year over year.

American Airlines has been trying to regain growth momentum by strengthening premium airline services and member loyalty businesses. Compared to basic economy class fares, these two fields are more resistant to price fluctuations. The company said it offset nearly 50% of the increase in fuel costs by increasing ticket prices in the second quarter.

American Airlines said that due to rising fuel costs, the company expects fuel spending to increase by 1.7 billion US dollars year-on-year in the third quarter. On top of an additional 2.2 billion US dollars in fuel costs that have been added so far this year, cost pressure has further intensified. The company expected a third-quarter adjusted loss of 10 cents to 70 cents per share, while analysts expected earnings of 28 cents per share.

American Airlines also said that adjusted losses for the full year of 2026 could be as high as 65 cents per share, lower than its April forecast loss of 41 cents per share; under the most optimistic circumstances, the company expects to achieve earnings of 65 cents per share for the full year, higher than analysts' previous expectations of 61 cents per share. In its financial report for the first quarter of this year, the company anticipated full-year adjusted earnings per share of -$0.40 to $1.10.

This more pessimistic outlook puts even more pressure on CEO Robert Issom. Since this year, American Airlines' stock price performance has been weak, and it is also facing a potential merger proposal from United Airlines (UAL.US), which Isom has previously rejected.

When American Airlines' results were announced, its main rivals were showing some resilience and benefiting from strong demand for high-priced tickets. This month, Delta Air Lines (DAL.US) reaffirmed its full-year profit guidance, and United Airlines released a more optimistic performance outlook.