American Airlines expects adjusted fourth-quarter loss of 50 cents to $1.10 a share

American projects average fourth-quarter fuel price of about $4.70 a gallon, expects 2027 growth to decelerate

American Airlines on Thursday said it expects an adjusted loss of 50 cents to $1.10 a share in the fourth quarter, the latest sign that surging jet fuel prices stemming from the continuing war in the Middle East are outweighing strong travel demand. The carrier reported a third-quarter loss of $269 million, or 41 cents a share, compared with a loss of $114 million, or 17 cents a share, a year earlier. On an adjusted basis, the quarterly loss came to 28 cents a share, compared with analyst views for an adjusted loss of 36 cents.

Revenue climbed 19% to $16.34 billion in the third quarter, ahead of analyst estimates, with improving sales across the carrier’s premium, main cabin, domestic, and international seats. “That’s the strongest quarterly revenue growth of my career,” said Chief Executive Robert Isom, who served as the airline’s president for six years before stepping into the CEO role in 2022. “Unfortunately, the significant increase in fuel prices more than offset that strength.”

Fuel expenses jumped 68% to $4.6 billion in the quarter, with the airline paying an average of $3.85 per gallon. For the fourth quarter, American projected an average fuel price of about $4.70 a gallon, nearly double the price paid in the quarter a year earlier. At that price, the company anticipates fuel expenses to increase by $2.8 billion.

Fourth-quarter revenue is projected to climb 19.5% to 22.5%, during which American is on track for the adjusted loss of 50 cents to $1.10 a share. Analysts surveyed by FactSet expected an adjusted loss of 52 cents a share. For the full year, the carrier now anticipates an adjusted loss of $1 to $1.60 a share, after cutting its initial outlook several times this year as costs ran up.

“Given today’s elevated fuel prices, we now expect our growth rate in 2027 to decelerate considerably,” Isom said on a call with analysts. American also said network growth is projected to slow in 2027. For the fourth quarter, capacity is expected to grow between 5.5% and 6.5%. Passenger load factor — a key industry metric measuring how efficiently an airline fills its available seating capacity — came in at 83.4%, down from 86% a year earlier, as capacity climbed 4.2% while traffic ticked up 1%.

American is not the only carrier hurt by higher jet fuel costs. Southwest Airlines and Delta Air Lines both cut guidance on rising fuel expenses this month, and United Airlines Chief Executive Scott Kirby told investors that pains from the high prices are likely to continue to rattle the industry into next year. Airlines have increased prices to offset their rising costs.

Shares, which initially fell in premarket trading, were recently up 2.8% at $12.58. Despite the gain, the stock has lost nearly a fifth of its value year to date.

American Airlines’ fourth-quarter forecast is the latest turn in a fuel-cost squeeze stemming from the continuing war in the Middle East. In June, MSI reported that the carrier was temporarily suspending select routes for the summer as jet fuel costs climbed; four months later, the company is projecting an average fourth-quarter fuel price of about $4.70 a gallon and expects its 2027 growth rate to decelerate considerably.