Why did American Airlines reverse its 2026 earnings forecast just 13 days after initially planning to raise it?

American Airlines reversed its 2026 earnings forecast because its projected fuel bill for the rest of the year rose by nearly $1.6 billion, overwhelming revenue gains from strong travel demand and fare increases; as CFO Devon May stated, higher fares offset only about half of a $2.2 billion year-over-year increase in second-quarter fuel expense, and a one-cent rise in average fuel price adds $46 million annually to its pretax expenses.

How do differing fuel price assumptions across U.S. airlines explain why Delta maintained its outlook while American and Southwest lowered theirs?

Airlines issued forecasts based on jet fuel spot prices from different dates — Delta’s on July 2 ($2.81/gallon), American’s on July 21 ($3.59/gallon) — during a period when prices surged 78 cents per gallon; this 30% jump between July 2 and July 22 meant outlooks issued days apart became incomparable and rapidly outdated, forcing carriers like American and Southwest to revise downward while Delta’s earlier, lower-fuel assumption allowed it to hold its guidance.

Fuel Swings Turn US Airline Earnings Forecasts Into Moving Targets

Jul 24, 2026

Surging jet fuel prices compel U.S. carriers to slash earnings guidance, exposing sensitivity to energy commodity volatility. American Airlines reduced its forecast after fuel costs jumped $1.6 billion, impacting margins across the aviation sector.

reuters

2026-07-24

Fuel Swings Turn US Airline Earnings Forecasts Into Moving Targets

Fuel Swings Turn US Airline Earnings Forecasts Into Moving Targets

FAQ