American Airlines slows capacity growth as jet fuel costs pressure carriers

American Airlines expects fuel bill about $7 billion above initial forecast

American Airlines plans to materially decelerate capacity growth next year, CEO Robert Isom said on CNBC, as higher jet fuel prices weighed on third-quarter results. The carrier forecasts another quarterly loss in the current period even as it expects to increase capacity by 5.5% to 6.5% in the current quarter. American Airlines was 4.5% lower in premarket trading at 1327 GMT, 3% lower in early trading at 1333 GMT and 1% lower in early trading at 1339 GMT.

Isom described a sharp change in the airline’s near-term outlook and said he did not expect fuel prices to come down anytime soon. “If we had talked two months ago, three months ago—we were expecting profitability in the fourth quarter,” he said on CNBC. “If we look out into the new year: Yes, I think that fuel prices are going to be higher, longer,” Isom said. “But we adjust to that, and so whether it’s capacity and better matching supply and demand, or giving our customers something that they are willing and want to pay more for,” Isom said.

Isom asked investors to focus on record revenue growth rather than the carrier’s revised full-year loss outlook. He attributed the financial result to fuel. The third-quarter fuel increase was $1.9 billion, and the expected fourth-quarter increase was $2.8 billion. American expects to pay about $7 billion more for fuel this year than it expected at the beginning of the year.

The carrier has spent the past few years rebuilding its network, including reestablishing itself at airports such as Chicago, Philadelphia and Miami. Isom said the work was intended to establish a leading North American network, with more details on the planned slowdown due in the first quarter.

Forsyth Barr said Air New Zealand’s balance sheet can cope with headwinds buffeting the travel sector, including higher fuel costs. Analyst Andy Bowley said Air New Zealand’s operating data suggest robust yield improvement through the first quarter on constrained capacity, and that higher revenue was blunting inflationary pressures.

Forsyth Barr expects Air New Zealand to generate material losses through FY27, adding to the recent pressure on the carrier’s book equity or net tangible assets. The firm’s estimate has net tangible assets falling to NZ$0.39 per share in FY 2027 before recovering from FY 2028 as profitability returns. Forsyth Barr said it did not foresee liquidity issues in the meantime or a need to raise additional equity, but continued to expect the company to defer capital spending where possible to prudently manage the balance sheet.

Tesla’s earnings underwhelmed markets and the company’s core electric-vehicle business looked weak, AJ Bell strategist Russ Mould wrote. Mould said lower average sale prices amid competition from China weighed on the vehicle business, while a shortage of battery supplies left Tesla struggling to keep up with orders. He said investors were more preoccupied with the company’s potential merger with SpaceX than with earnings. Tesla shares fell 4.35% in premarket trading amid a broader technology selloff.

Mwb analyst Jens-Peter Rieck said Renk could use proceeds from the sale of its slide bearings business for share buybacks or a bolt-on acquisition in unmanned systems. Rieck said the latter would address a structural concern Mwb had regarding Renk and pointed to the CEO’s scheduled update on Dec. 8 as the main event to watch for strategy. Shares in the German defense company traded 1.1% lower at 36.88 euros.

Taiwan’s blocking of Grab’s purchase of Foodpanda Taiwan was partly expected and shifts attention toward Uber in Southeast Asia, DBS Group Research’s Sachin Mittal said. Taiwan’s Fair Trade Commission said Uber’s more than 13% stake in Grab, past board overlap and commercial history would blunt market competition. The commission said Uber would need to cut or exit its stake to remove the risks.

Uber’s takeover of Delivery Hero, due to close in 2H next year, includes Foodpanda operations in Singapore, Malaysia and the Philippines, Mittal wrote. If Southeast Asian regulators took the same stance as Taiwan, Uber may have to carve out the Foodpanda business in the region or sell its Grab stake.

Earlier, MSI reported that American Airlines suspended selected summer routes as jet-fuel costs rose during the war with Iran. In the current roundup, the airline was slowing future capacity growth and revising its full-year outlook to a loss as fuel prices remained elevated.