American Airlines expects a full-year net loss after a third-quarter profit was erased by soaring fuel costs. The company’s financial performance was affected by the significant increase in fuel costs.
For the September quarter, the carrier posted operating income of $115 million, but non-operating items, mainly interest, pushed net results to a $269 million loss and an adjusted loss of $0.28 per share. This was due to various factors, including rising fuel costs.
Revenue climbed to $16.3 billion, up 19.3% from a year earlier. The airline projects fourth-quarter revenue to rise between 19.5% and 22.5% year over year as fares stay more than 20% above last year. They expect this growth to continue despite the challenges posed by fuel costs.
Fuel spending surged, with the company paying $1.9 billion more in the quarter than a year ago—a 67.5% jump despite only a 4.2% increase in seat-mile capacity. Over the full year, fuel expenses are expected to exceed the prior year by more than $7 billion.
Chief executive Robert Isom stated that the company would have been profitable if not for the fuel spike. He made this statement during the earnings call with analysts, highlighting the impact of fuel costs on the company’s profitability.
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For the upcoming quarter, the airline plans to add between 5.5% and 6.5% more systemwide capacity measured by available seat miles compared with a year ago. However, they will trim their earlier target for December domestic growth from 11.2% to 8.3%. This adjustment is intended to help manage the ongoing cost pressures.
Robert Isom noted that the carrier could return to profitability next year if energy prices stay stable. He cited ongoing upgrades to lounges, premium cabins, Starlink Wi-Fi, and seat-back screens as contributors to future earnings.
Adjusted loss per share for the fourth quarter is forecast between $0.50 and $1.10, with full-year losses projected in a range of $1.00 to $1.60 per share. The company’s financial projections take into account the ongoing challenges posed by fuel costs.
The airline will fly less capacity than originally planned for the current quarter and anticipates slower capacity expansion in 2027 as it manages the ongoing cost pressures.