Fuel Bill Pushes American Into the Red as Southwest Trims Outlook

Two of the largest US airlines reported record revenue this week but warned that soaring jet fuel prices are eroding the gains. American Airlines Group Inc. now expects a loss for the year and plans to slow its growth.

American said on Thursday that third-quarter revenue rose 19.3% to $16.3 billion, the highest for any third quarter in its history. Its fuel bill rose even faster. The carrier paid an average of 3.85 dollars a gallon, up from 2.37 dollars a year earlier, pushing fuel expense up 1.9 billion dollars. It posted an adjusted loss of 28 cents a share.

The Fort Worth, Texas-based airline forecast an adjusted loss of between 1 dollar and 1.60 dollars a share for 2026. It assumes fuel near 4.70 dollars a gallon in the fourth quarter, nearly double a year earlier. American said network growth will slow next year because of high fuel prices. Chief Executive Officer Robert Isom said the company’s focus “remains on restoring profitability.”

Southwest Airlines Co. fared better. The Dallas-based carrier reported record third-quarter revenue of $8.4 billion, up 21%, as unit revenue climbed 21.6% while capacity edged lower. Adjusted earnings rose to 66 cents a share from 11 cents a year earlier. That came despite fuel averaging 3.92 dollars a gallon, which added 821 million dollars in costs.

Even so, Southwest lowered its full-year forecast to adjusted earnings of 2.60 dollars to 2.85 dollars a share and trimmed planned capacity growth. Chief Executive Officer Bob Jordan said customers were “responding to the enhanced Southwest offering.” The airline is adding extra-legroom seating, Starlink Wi-Fi and its first airport lounges.

The results follow a similar warning from United Airlines Holdings Inc. earlier in the week. They underline how a fuel shock tied to conflict in the Middle East is squeezing airline profits even as travelers keep paying higher fares.