Key Points
- Fuel expenses grew $7 billion over the course of the year, and American expects to pay as much as $4.70 a gallon in the fourth quarter. Isom said American would be solidly profitable without that increase and can be profitable in 2027.
- American is slowing growth in 2027 after outgrowing its rivals. Fourth-quarter capacity is forecast up 5.5% to 6.5%, compared with roughly 2% at Delta and United, with the gap tied to rebuilding the Chicago, Miami, Philadelphia, and Phoenix hubs.
- Premium investments — fleetwide Starlink, seatback screens, more premium seats, and the end of involuntary bumping — are landing alongside fourth-quarter revenue guidance of up 19.5% to 22.5%. Isom said there is still room to push fares higher.
Summary
American Airlines CEO Robert Isom told analysts Thursday the carrier can be profitable in 2027 despite a $7 billion increase in fuel expenses over the course of the year, which he said would otherwise have left American “solidly profitable.” American expects a deeper full-year loss and is projecting fuel costs as high as $4.70 a gallon in the fourth quarter. At the same time, it is projecting fourth-quarter revenue up 19.5% to 22.5%, which Isom attributed partly to investments in the premium passenger experience — fleetwide Starlink, seatback screens on domestic narrowbodies, a larger premium seat share, upgraded main cabin snacks, new international routes, and an end to involuntary bumping. American will slow growth in 2027 to protect profitability if fuel stays high. Its fourth-quarter capacity is forecast up 5.5% to 6.5%, against roughly 2% at both Delta Air Lines and United Airlines, a gap Isom tied to rebuilding hubs in Chicago, Miami, Philadelphia, and Phoenix. Chief commercial officer Nat Pieper said the focus shifts toward international growth and the joint ventures with Alaska Airlines, IAG, JAL, and Qantas. Isom said there is more room to raise fares, and that recent increases have put airfares on par with pre-pandemic pricing.
Source: skift.com
