NEW YORK, July 24, 2026 – American Airlines Group (NASDAQ:AAL) saw its stock plunge 8.35% on Thursday, closing at $13.555, after the carrier revealed that soaring fuel costs had consumed nearly all of its revenue growth, severely squeezing profitability. The airline revised its full-year 2026 earnings forecast to a range between a loss of $0.65 per share and a gain of $0.65 per share, with a new midpoint of breakeven. That marks a significant downgrade from the previous outlook of a $0.40 loss to a $1.10 gain.
In the second quarter, American’s revenue increased by $2.343 billion compared to the same period last year, but fuel costs jumped by $2.218 billion, accounting for 94.7% of the additional revenue. Operating income fell 60.7% to $446 million, while net income plummeted 88.2% to $71 million. The adjusted pretax margin shrank to just 0.9%, or less than a cent per dollar of revenue.
The margin performance stands in stark contrast to competitors. Delta Air Lines (NYSE:DAL) reported a 7.7% adjusted pretax margin and left its 2026 EPS forecast unchanged at $6.50 to $7.50. United Airlines (NASDAQ:UAL) posted a 4.8% margin and raised its outlook to a range of $9.00 to $11.00 per share. American’s weaker margin highlights its limited ability to absorb further fuel price increases.
American’s sensitivity to fuel costs is acute. Every one-cent rise in jet fuel prices adds about $46 million to the carrier’s annual fuel bill. A 10-cent increase translates to $460 million, an amount slightly above the company’s second-quarter operating profit. The company projects fuel costs around $3.75 per gallon in the third quarter.
Revenue growth remains robust, with passenger yield up 11.9% and passenger unit revenue rising 10%. Capacity increased 5.4%, but the load factor declined by 1.5 percentage points, indicating some softening in demand relative to capacity. The carrier expects third-quarter revenue growth of 16% to 19%, but adjusted EPS is forecast to range from a loss of $0.70 to a loss of $0.10.
Chief Financial Officer Devon May acknowledged the recovery rate was “obviously not 100%,” referring to the airline’s ability to pass on higher fuel costs to customers. Since the start of July, projected fuel expenses for the remainder of 2026 have risen by nearly $1.6 billion.
External factors remain volatile. Brent crude oil fell 1.8% early Friday to $98.87, but was still on track for a 12% weekly gain. Key data releases next week include U.S. petroleum data on July 29, the advance estimate for second-quarter GDP on July 30, and the Federal Reserve’s policy meeting on July 28–29. A rapid decline in oil prices would benefit American’s cost base, while any supply disruptions could push fuel costs higher. Weaker economic growth could also challenge recent fare increases.
Shares of American Airlines fell 9.5% compared to last Friday’s close after Thursday’s drop. Trading volume was about 15% above the 65-day average. In premarket trading Friday, the stock edged up 0.7% to $13.65. Investors are now focused on fuel cost recovery as the key challenge, rather than top-line revenue growth. With record sales expected to keep the airline near breakeven, the path to improved profitability remains uncertain.
