High fuel costs erode profits at major US airlines
New York (ANTARA) – As major US airlines reported their third-quarter (Q3) 2026 operating results, rising fuel costs squeezed profit margins despite strong travel demand.
Although revenues reached records and travel demand remained strong, higher operating costs continued to erode profits and weakened earnings expectations ahead of the final quarter of 2026.
American Airlines reported a net loss of US$269 million (US$1 = Rp18,047) in Q3 2026, despite posting record revenue of US$16.3 billion.
Its fuel costs rose by US$1.9 billion, or 67.5 per cent, with the average fuel cost reaching US$3.85 per gallon.
The airline expects to pay US$4.70 per gallon in the fourth quarter (Q4) of 2026, almost double the price paid in Q4 2025. Its quarterly fuel bill is projected to increase by about US$2.8 billion year on year.
American Airlines also lowered its full-year forecast, projecting an adjusted loss of US$1 to US$1.60 per share, compared with its previous outlook for a loss of 65 cents to a profit of 65 cents per share.
Southwest Airlines reported similar challenges on Wednesday (21 October), although its Q3 profit exceeded Wall Street expectations.
According to a Southwest Airlines press release, the Dallas-based carrier posted net profit of US$270 million, while operating revenue rose 21.2 per cent to US$8.4 billion, a Q3 record for the company.
However, Southwest’s fuel costs increased by US$821 million compared with the same period last year, and its Q3 fuel cost reached US$3.92 per gallon, above its previous assumption of US$3.70–US$3.75 per gallon.
“Demand remains strong as we move beyond last year’s baggage-fee implementation period and other commercial initiatives, reinforcing our confidence that the earnings power we have built is durable, even with significantly higher fuel costs,” Southwest Airlines chief executive Bob Jordan said in a press release on the company’s Q3 2026 earnings.
“We remain confident in our ability to strengthen earnings, improve returns and expand margins over time,” Bob said.
Southwest Airlines assumes Q4 2026 fuel costs of about US$4.55 per gallon, based on the forward curve as at 15 October 2026.
United Airlines reported Q3 2026 revenue of US$17.9 billion on Tuesday (20 October), up 17.4 per cent from the same period last year, with net profit reaching US$1 billion. However, its fuel costs rose by US$1.8 billion, or 62 per cent, year on year, according to the company’s Q3 2026 earnings report.
United Airlines expects to pay about US$4.80 per gallon for fuel in Q4 2026, compared with US$3.90 in Q3 2026. The airline forecast adjusted earnings of 50 cents to US$1.50 per share for Q4 2026, below Wall Street expectations.