Full Breakdown
U.S. Airlines Grapple with Record Fuel Costs: Diverging Earnings Paths for American and United
By Drooid · · How we work
Core Earnings Outlook
American Airlines announced it expects a full-year adjusted loss of $1.00-$1.60 per share, widening the range it set in July. The carrier also projected a fourth-quarter adjusted loss of $0.50-$1.10 per share despite anticipating revenue up as much as 22.5% year-over-year and capacity growth of 5.5%-6.5%. United Airlines, by contrast, reported record third-quarter operating revenue of $17.9 billion and signaled top-line growth of more than 20% year-over-year for the fourth quarter, keeping its adjusted earnings per share within guidance.
Fuel Cost Surge and Its Effects
Jet fuel, the airline industry’s largest expense after labor, rose sharply after the start of the Iran war. American’s third-quarter fuel bill increased 67.5% from the prior year to $4.64 billion, contributing to a $0.28-share adjusted loss after one-time items. United acknowledged a “sharply higher fuel bill” that pressured margins, noting that fares have only partially caught up with jet-fuel price increases.
Official Statements & Responses
American CEO Robert Isom highlighted the carrier’s record third-quarter revenue and premium performance, asserting that investments across its commercial strategy are delivering results. United CEO Scott Kirby emphasized employee resilience and the airline’s focus on building brand-loyal customers, while expressing confidence that the company will eventually recover the full rise in fuel costs.
Data & Statistics
- American’s third-quarter revenue: $16.34 billion, up 19.3% YoY.
- United’s third-quarter operating revenue: $17.9 billion, a record.
- American’s fuel expense increase: +67.5% YoY to $4.64 billion.
- Stock reactions: United up ~6% to $103.88; American up ~4% to $12.57; Delta up ~3% to $79.
Market Impact
Investors have rewarded United’s revenue outlook, lifting its shares ahead of rivals, while American’s loss forecast has tempered its stock performance despite a modest pre-market gain. The broader airline sector remains buoyed, with the U.S. Global Jets ETF rising 2%, reflecting optimism about demand even as fuel cost volatility persists.
Verbatim Quotes
- “American delivered record third-quarter revenue and the strongest year-over-year revenue growth in my career, with premium performance leading the way,” — American CEO Robert Isom
- “Our employees met the challenge of our ever-changing environment and our results prove the resilience of focusing on building a brand-loyal airline for customers.” — CEO Scott Kirby