Earnings
American Airlines lifts revenue 19% but books a third-quarter loss as fuel costs jump 67.5%; sees fourth-quarter fuel near $4.70 a gallon
The carrier forecast a wider loss for the full year, with fuel expected to climb further in the final quarter even as premium and corporate demand stays strong.
HedgeWeekly News Desk ·
American Airlines Group reported a third-quarter net loss of $269 million, or 41 cents a share, on Thursday, as a sharp rise in fuel costs outweighed record-level demand gains. Excluding special items, which include an impairment on its stake in Republic Airways Holdings, the loss was $182 million, or 28 cents a share. Total revenue rose 19.3% to $16.3 billion.
Fuel was the decisive line. The airline spent $4.64 billion on jet fuel and related taxes, up 67.5%, or $1.9 billion, from a year earlier, as its average price climbed 62.7% to $3.85 a gallon. Revenue per available seat mile rose 14.5%, while unit costs excluding fuel, special items and profit sharing increased 3.0%. Premium revenue grew 22.9% and managed corporate revenue 27.6%.
For the fourth quarter, American expects fuel of about $4.70 a gallon, adding roughly $2.8 billion of fuel expense versus a year earlier, and an adjusted loss of $0.50 to $1.10 a share on revenue growth of 19.5% to 22.5%. It guided to a full-year adjusted loss of $1.00 to $1.60 a share and said network growth would slow in 2027. The company ended the quarter with $11.8 billion of available liquidity and $28.1 billion of net debt.
Why it matters: American's own guidance assumes fuel about 22% above its third-quarter average, which puts the burden on fares and premium demand to offset costs that are largely outside management's control. With net debt above $28 billion against a stated 3.0 times net debt to EBITDAR target, investors will watch whether the planned slowdown in 2027 capacity growth and the nearly $1 billion of run-rate savings the company targets by year-end are enough to protect the balance sheet if fuel stays elevated.