American Airlines faces fuel-cost summer test

American Airlines entered the late-May travel push with strong bookings and a sharply higher fuel bill. On April 23, the Fort Worth, Texas-based carrier said it expected record second-quarter revenue even as higher jet-fuel prices cut into profit guidance. The company said its 2026 outlook now assumes more than $4 billion of added fuel expense compared with 2025. That leaves the airline heading into the Memorial Day travel period with demand intact but costs still elevated. ### How much has American said fuel is costing it? American Airlines said on April 23 that its second-quarter guidance assumes jet fuel at about $4.00 per gallon. The company said the midpoint of its full-year guidance was roughly flat to 2025 despite what it called a greater than $4 billion increase in expense tied to higher jet-fuel prices. (news.aa.com) Reuters reported the airline cut its 2026 adjusted earnings outlook to a range from a loss of 40 cents a share to a profit of $1.10, down from a prior forecast of $1.70 to $2.70. Reuters said American expected to recoup close to half of those higher fuel costs in the second quarter, with recovery improving later in the year if elevated prices persisted. (news.aa.com) ### Where are jet-fuel prices now? Airlines for America said the Argus U.S. jet-fuel index was $3.90 a gallon on May 15. That reading was close to the roughly $4-a-gallon assumption American used in its second-quarter guidance three weeks earlier. IATA said its jet-fuel monitor provides weekly updates on the global jet-fuel price index and the impact on airline fuel bills. American did not cite IATA in its guidance, but the industry data point to fuel remaining a central variable for airline margins as summer flying ramps up. (money.usnews.com) That last point is an inference based on American’s guidance and industry fuel benchmarks. ### If demand is strong, why is this still a test? (airlines.org) American said first-quarter revenue reached a record $13.9 billion, even with an estimated $320 million hit from winter storms. The carrier said total revenue rose 10.8% from a year earlier and that it expected second-quarter revenue growth of 13.5% to 16.5% based on current bookings. CEO Robert Isom said the airline was “on track for another record in the second quarter.” (iata.org) Reuters reported that airlines sell many tickets in advance, limiting how quickly they can pass through a sudden jump in fuel costs. Reuters also said American was seeing better domestic demand after an earlier glut and expected unit revenue growth of more than 10% in the second quarter. ### What does the Memorial Day rush look like? (news.aa.com) AAA said 45 million Americans are expected to travel at least 50 miles from home between Thursday, May 21, and Monday, May 25, a Memorial Day record. Of that total, AAA projected 3.66 million people would take domestic flights, up slightly from last year. AAA also said average domestic round-trip airfare for Memorial Day trips booked through its channels was 6% lower than a year earlier, at $800. (money.usnews.com) The group said many of those tickets were booked before rising jet-fuel prices began affecting airfare. ### What will investors and travelers watch next? American’s investor relations calendar lists its next scheduled earnings call for July 24, when the carrier is due to report second-quarter 2026 results. (midstates.aaa.com) That report will give investors a clearer read on how much of the spring fuel increase the airline was able to recover during the first major stretch of summer demand. The May 21-25 holiday period will provide the nearer operational checkpoint. AAA’s traffic forecast and American’s own second-quarter guidance put the focus on whether strong passenger volumes can offset a fuel environment still running near $4 a gallon. (midstates.aaa.com) (americanairlines.gcs-web.com)