Meanwhile, United Airlines beat second-quarter expectations with $17.7 billion in revenue and raised its full-year profit guidance despite similar energy headwinds.
The U.S. airline industry’s financial divergence widened as two major carriers reported contrasting fortunes amid volatile energy markets. While robust travel demand continues to drive strong top-line revenue, carriers are absorbing sharply higher operational expenses driven by surging oil prices.
American Airlines Cuts Guidance as Fuel Costs Outpace Fares
American Airlines Group Inc. reduced its full-year earnings guidance for the second time in three months, pointing to persistently high fuel prices. The carrier warned that its full-year adjusted loss could reach as high as 65 cents a share, worsening from the 41-cent loss predicted in late April.
In a best-case scenario, American stated it might achieve a profit of 65 cents a share. For the current third quarter, the carrier projected an adjusted loss between 70 cents and 10 cents a share, missing analyst estimates of 28 cents per share in earnings, though it expects revenue to rise between 16% and 19%.
During the second quarter ended June 30, American’s profit fell 88% from a year earlier to $71 million, or 11 cents a share, down from $599 million, or 91 cents a share, in the prior-year period. Total revenue rose 16.3% to $16.74 billion. Adjusting for one-time items, American posted earnings of 15 cents a share against expectations of 3 cents.
American CEO Robert Isom told CNBC that the carrier’s plan is to close the margin gap with industry profit leaders Delta Air Lines and United Airlines, though he did not provide a definitive timeframe. The airline plans to order new wide-body aircraft and add high-yielding premium seats to older jets.
United Airlines Beats Second-Quarter Estimates and Raises Guidance
United Airlines Holdings Inc. reported stronger-than-expected second-quarter results and raised its full-year adjusted profit outlook. United posted adjusted earnings of $1.99 per share, beating analyst expectations of $1.85 per share, while quarterly revenue reached $17.7 billion.
Reflecting this momentum, United raised its full-year adjusted diluted earnings per share guidance to a range of $9.00 to $11.00. The airline credited resilient consumer demand, improving ticket yields, and robust performance across its premium, cargo, and loyalty segments. Premium cabin revenue increased 16% year over year, while contracted business revenue climbed 27% and cargo revenue rose 23%.
Kirby added that United is built to thrive in every environment, and when oil prices spiked in March, we quickly and decisively acted to adjust our schedules, while simultaneously doubling down on our customer investments.
Fuel Price Pressures and Operational Strategies Across Carriers
Fuel expenses remain the single largest variable pressure across the commercial airline sector after labor. United reported that quarterly fuel expenses surged 84%, adding $2.3 billion year over year, and warned that elevated energy costs could add nearly $6 billion to its annual fuel bill for 2026. However, United management expects higher ticket prices and sustained demand to recover 80% to 90% of those additional costs in the third quarter and fully recover them by the fourth quarter.
American Airlines similarly noted that surging fuel expenses are biting into margins despite a 10% increase in passenger revenue per available seat mile. While American plans to expand flying capacity by up to 5% in the third quarter, high energy volatility continues to cloud its profitability trajectory relative to its peers.
| Carrier | Q2 Adjusted EPS | Q2 Revenue | Full-Year Guidance Update |
|---|---|---|---|
| American Airlines | 15 cents (vs. 3 cents expected) | $16.74 billion | Adjusted loss of up to 65 cents or profit up to 65 cents |
| United Airlines | $1.99 (vs. $1.85 expected) | $17.7 billion | Raised adjusted EPS guidance to $9.00–$11.00 |
Both carriers are aggressively pursuing balance sheet strength and customer enhancements. United ended June with $19.6 billion in available liquidity after raising $3.7 billion in new liquidity during the quarter, prepaying about $1 billion of higher-cost debt. United has also expanded its Starlink in-flight internet rollout, with 450 aircraft equipped and nearly 1,000 planes scheduled to feature the service by the end of the year.
Sources: CNBC.