In short: Record revenue of $16.7B (+16% Y/Y, $50M beat) and adj EPS of $0.15 ($0.10 beat) but down from $0.95 a year ago; shares fell as much as 9%, the worst day in a year, with the stock down 24% this month. CFO Devon May said American was tracking toward roughly $1.5B in FY26 pretax profit three weeks ago — fuel expectations for the back half have jumped almost $1.6B since. The premium build is working: premium unit revenue +13%, managed corporate revenue +26% for a fifth straight quarter, record AAdvantage enrollment on the new Citi co-brand, and nearly 60% of revenue from households earning $150,000 or more; American offset almost half of a $2.2B fuel increase through fares, holding non-fuel unit costs under 3% while total unit costs rose 17%. Working against it: fuel costs spiked 83% Y/Y with crude above $100 and the full-year headwind approaches $6B, while Q3 capacity growth was trimmed by about two points to 3%–5%, capping the revenue that offsets fuel. FY26 guidance dropped to a loss of $0.65 to a profit of $0.65 (vs ~$0.60 profit consensus), the second cut in three months — in contrast, Delta reaffirmed and United guided up. CEO Robert Isom has rebuffed United's merger overtures, betting premium and loyalty can close the gap with Delta and United on its own, but every fuel-driven cut makes that case harder to argue. (Recap, not a stance call.)
American Airlines flew more people and charged more than ever — record revenue, up 16% — and still barely made money, because jet fuel costs 83% more than a year ago with crude oil above $100 a barrel. The scale of it: the full-year fuel headwind approaches $6 billion, and in just three weeks the outlook for second-half fuel worsened by $1.6 billion, wiping out what the finance chief had been describing as roughly $1.5 billion of expected annual pre-tax profit. The company cut its full-year forecast for the second time in three months, to somewhere between a small loss and a small profit.
The strategy underneath is actually working. American has been shifting toward the profitable end of flying — premium cabin revenue up 13%, corporate travel up 26% for the fifth straight quarter, record credit-card loyalty sign-ups, and nearly 60% of revenue now from households earning $150,000 or more — and it recovered almost half the fuel increase through higher fares. But Delta reaffirmed its outlook and United raised theirs, so American is visibly the weakest of the three. Its CEO has turned down merger approaches from United, arguing it can close the gap alone; each fuel-driven downgrade makes that harder to argue. A recap, not a call.
In short: The "notoriously bad business" in his airlines-vs-suppliers analogy — capital-intensive, no pricing power. Compare its 10-year chart to TransDigm's "and you get the point"; hyperscalers risk becoming "airlines."
11:58It's very capital intensive and no airline has any pricing power. However, companies like TransDigm that supply parts and services to airlines are great businesses. Just compare the 10-year charts of American Airlines and TransDigm and you get the point. It's possible that the hyperscalers and large AI players are becoming like airlines while their suppliers are becoming like TransDigm.
In short: Referenced — American (with United) lowered 2026 guidance the prior week because of the war, the same war-driven cut Booking made this week.
20:13Bookings, a very good company. But last week, United Airlines and American Airlines lowered 2026 guidance because of the war. This week, Bookings reported and did the same thing. The actual reported results were fine with EPS growth of 15%. However, for the June quarter, the company cut its revenue growth outlook to four to 6% versus the consensus of 11% and the stock was down on this report.
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