American Airlines Group Inc. shares traded higher in premarket action Tuesday, as investors weighed renewed geopolitical tensions that sent oil prices sharply higher. The stock gained 26.5 cents, or about 2%, to $13.85 in early trading, with Delta Air Lines and United Airlines also posting gains. The broader U.S. Global Jets ETF edged up 12.5 cents to $27.13.
The uptick comes after U.S. markets reopened following the Memorial Day holiday. Brent crude, the global benchmark, rose more than 3% Tuesday as fresh U.S. strikes on Iran dampened hopes for a Middle East peace deal, according to Reuters. European airline stocks fell as oil came back into focus, with Craig Cameron of Templeton Global Investments noting that investors are watching to see if a deal could normalize traffic through the Strait of Hormuz.
Fuel costs remain the biggest variable for airlines, particularly as the industry heads into the peak summer travel season. American Airlines is bracing for jet fuel expenses to climb by over $4 billion this year, a significant headwind that has already prompted a downward revision to its 2026 profit outlook. The Fort Worth-based carrier now projects adjusted earnings per share between a 40-cent loss and $1.10 profit for 2026, stripping out special items.
The company reported record first-quarter revenue of $13.9 billion, though it posted a GAAP net loss of $382 million. Total debt fell to $34.7 billion, the lowest since mid-2015. CEO Robert Isom said American was on track for another record in the second quarter, citing rising demand. Isom is scheduled to speak at Bernstein's 42nd Annual Strategic Decisions Conference on Wednesday at 9 a.m. ET, with the event streaming on the company's investor relations site.
Airlines are already taking steps to offset higher costs. Reuters reported that American Airlines hiked checked-bag fees this month, following similar moves by Delta Air Lines, which also cut some capacity. United Airlines CEO Scott Kirby has warned that fares may need to rise 15% to 20% if fuel costs remain elevated.
The premarket moves suggest some buyers are returning to airline names as markets open, but they do not signal that margin worries are over. If oil stays elevated, airlines could face a prolonged period of higher costs, potentially forcing them to push up fares, add fees, or cut flights during the busy summer travel season. Patrick De Haan, head of petroleum analysis at GasBuddy, described it as the most volatile summer at the pump in years, cautioning that fuel prices may stay high even after the Strait of Hormuz is moving again.
On the upside, if fuel prices decline, strong travel demand could allow airlines to use higher revenue to offset recent cost increases. That scenario is what investors will be watching for when regular trading begins and when Isom speaks on Wednesday.
