American Airlines Beats Q2 Estimates but Cuts Guidance on Surging Fuel Costs

American Airlines Group Inc. (NASDAQ: AAL ) shares traded lower Thursday after the carrier reported second-quarter 2026 results that beat analyst expectations but cut its full-year earnings outlook.

Adjusted EPS of 15 cents topped the 3-cent estimate, while record revenue rose 16.3% to $16.735 billion, beating the $16.707 billion estimate.

Profit Pressured GAAP diluted EPS fell to 11 cents from 91 cents, while net income declined to $71 million from $599 million.

Adjusted net income was $99 million after excluding $28 million of after-tax special items.

Operating income fell 60.7% to $446 million as fuel expense surged 83.3% to $4.881 billion.

Higher fares offset nearly half of the more than $2.2 billion year-over-year fuel increase.

Revenue And Operations Passenger revenue rose 15.9% to $15.214 billion, cargo revenue increased 29.7% to $273 million, and other revenue grew 17.9% to $1.248 billion.

Premium passenger unit revenue increased 13.4%, while Main Cabin rose 8.8%.

Domestic unit revenue grew 10.6%, with Atlantic up 8.9%, Pacific up 15.1% and Latin America up 6.6%.

Managed corporate revenue increased 26%.

Capacity rose 5.4%, and passenger traffic increased 3.6%, while load factor declined 1.5 percentage points to 83.2%.

On-time arrival performance improved 2.8 points, and system misconnections fell nearly 25% following the Dallas-Fort Worth hub rebanking.

Liquidity And Cash Flow American ended the quarter with $11.3 billion of available liquidity and $1.028 billion in cash.

Current maturities of debt and finance leases were $3.094 billion, while long-term debt and finance leases totaled $25.833 billion.

First-half operating cash flow rose to $4.694 billion, while capital expenditures and aircraft purchase deposits totaled $1.633 billion.

Guidance Lowered American expects third-quarter adjusted losses of $0.70 to $0.10 per share, versus the $0.12 earnings estimate.

The outlook implies third-quarter revenue of approximately $15.882 billion-$16.292 billion, versus the $15.899 billion estimate.

The airline lowered full-year adjusted EPS guidance to a loss of $0.65 through earnings of $0.65 from a prior loss of $0.40 through earnings of $1.10, versus the $0.65 estimate, reflecting higher fuel costs.

Conference Call CFO Devon May said American’s expected third-quarter fuel cost has risen by more than $700 million since early July and by nearly $1.6 billion for the rest of 2026.

In the past week alone, the forecast increased by $230 million for the third quarter and nearly $550 million for the remainder of the year.

Management expects fuel prices to remain volatile.

The current fuel curve has weakened near-term expectations despite strong demand and pricing trends across the network.

American expects third- and fourth-quarter unit revenue growth to exceed the second quarter’s performance.

CEO Robert Isom said the company’s outlook for the remainder of 2026 could have been potentially four times better had it reported results a few weeks earlier.

AAL Stock Price Activity: American Airlines Group shares were down 7.40% at $13.70 at the time of publication on Thursday, according to Pro data.

Photo by Wenjie Zheng via Shutterstock Read Also: Boeing, Airbus, Major Airlines Push Congress for $20 Billion to Modernize Air Traffic Control: Report