Higher jet fuel costs weigh on American Airlines outlook

American Airlines lowered its annual profit outlook Thursday, pointing to higher jet fuel costs as a drag on otherwise healthy travel demand. Its shares fell 8.2 percent in late-morning trading.

The US carrier reported a modest second-quarter profit, but executives reduced the full-year estimate because the escalating US-Iran war has pushed oil prices back to around $100 a barrel. American's new earnings range has zero profit as its midpoint, down from an earlier range with a midpoint of 35 cents per share.

Chief Financial Officer Devon May said on a conference call that three weeks earlier the company expected to guide for full-year pre-tax earnings approaching $1.5 billion. He said the current fuel curve had lowered those expectations.

American reported second-quarter profit of $71 million, down 88.2 percent from a year earlier. Revenue rose 16.3 percent to $16.7 billion. The company said it saw broad-based growth across different price points, with both international and domestic demand up meaningfully from a year earlier.

Jet fuel costs rose by $2.2 billion from the second quarter of 2025. American said it expects $6 billion in additional jet fuel costs in 2026.

Company executives said consumer demand remains strong and said improving revenue measures show that efforts to improve performance are having an effect. CEO Robert Isom said progress was not linear and that he saw improvement continuing into 2027. He said that when fuel prices normalize, American would be the best investment available.

American has also made progress in reducing debt, leading to gradually lower interest expenses. Executives expressed optimism about a credit card venture with Citi and said the airline could regain market share in hubs including Phoenix, Miami and Philadelphia, where it had higher volumes before the pandemic.