American Airlines Shares Hit On Wider Q3 Loss, Cautious Outlook On Fuel Costs, Despite Strong Demand

(RTTNews) - Shares of American Airlines Group Inc. were losing around 4 percent in pre-market activity on the Nasdaq, after the airline reported Thursday wider net loss in its third quarter, issued loss warning for the fourth quarter, and revised fiscal 2026 outlook to expect loss, mainly on surging fuel costs.

Quarterly revenues, however, climbed from last year, and the firm sees continuing growth in the fourth quarter, benefited by demand strength.

American's CEO Robert Isom stated, "American delivered record third-quarter revenue and the strongest year-over-year revenue growth in my career, with premium performance leading the way.... While historically high fuel prices significantly impacted our financial results, our focus remains on restoring profitability and building a stronger American for the long term."

Looking ahead for the fourth quarter, the company projects adjusted loss per share of $1.10 to $0.50, despite total revenue growth of 19.5 percent to 22.5 percent.

Available seat miles are expected to increase 5.5 percent to 6.5 percent, and CASM excluding net special items, fuel and profit sharing to grow 2.5 percent to 3.5 percent.

Based on the forward fuel curve as of October 19, American anticipates an average fuel price of approximately $4.70 per gallon in the quarter, nearly double the price paid in the same period last year. At that price, fuel expense is expected to increase approximately $2.8 billion from last year.

Further, for fiscal 2026, the company now expects adjusted loss per share of $1.60 to $1.00. The company previously expected full-year adjusted results ranging from a loss of $0.65 per share to earnings of $0.65 per share.

Citing the elevated fuel prices, American also expects network growth in 2027 to slow from 2026 levels.

In the third quarter, American's net loss widened to $269 million or $0.41 per share from prior year's loss of $114 million or $0.17 per share.

Adjusted loss was $182 million or $0.28 per share for the period, compared to loss of $111 million or $0.17 per share a year ago.

Operating income dropped 23.4 percent to $115 million from last year's $151 million.

Total operating expenses climbed 9.8 percent from last year to $16.22 billion, mainly as fuel expense for the quarter increased $1.9 billion, or 67.5 percent, year-over-year.

The company's revenue for the period rose 19.3 percent to $16.335 billion from $13.691 billion last year, above the high end of the previously announced guidance range.

The results were driven by strong revenue performance across all geographies and cabins.

Passenger revenues climbed 19.5 percent year-over-year to $14.90 billion, and Cargo revenue climbed 29.1 percent.

Premium revenue increased 22.9 percent, and Main Cabin revenue increased 19.5 percent year-over-year.

Total unit revenue grew 14.5 percent year over year, reflecting continued strength in demand for travel.

In the quarter, domestic passenger unit revenue increased 13.6 percent, and International passenger unit revenue climbed 16.4 percent.

Latin America entity went up 21.1 percent, the Atlantic entity grew 14.5 percent, and the Pacific entity increased 11.3 percent.

The company noted that demand for business travel remained strong, with managed corporate revenue increasing 27.6 percent year over year, marking the sixth consecutive quarter of double-digit growth.

Premium passenger unit revenue increased 18.5 percent, compared with an increase of 14.4 percent in Main Cabin.

In the pre-market activity on Nasdaq, American shares were trading 4.13 percent lower at $11.73, after closing Wednesday's regular trading 1.03 percent higher.

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