NEW YORK, August 5, 2026, 9:15 a.m. EDT — U.S. premarket trading
- Early premarket: Shares of American Airlines were at $16.60, advancing 0.3%, following an 8.4% gain over the previous two sessions.
- Rising fuel costs accounted for 94.7% of the year-on-year revenue growth posted by American in the second quarter.
- A 10-cent rise in fuel prices over an extended period would represent roughly $115 million each quarter, accounting for 26% of operating income in the second quarter.
American Airlines Group Inc. NASDAQ:AAL prepared to challenge an 8.4% rise over two sessions on Wednesday after Brent crude climbed above $80. The stock gained 0.3% in premarket trading. Between five consecutive closes since July 29, shares climbed 11.6%.
Traffic alone is not the main indicator. Tuesday saw oil prices climb after a 5% decline. However, Wednesday’s recovery put some of those price decreases in question.
According to American’s filing, fuel costs accounted for 94.7% of the rise in second-quarter revenue. Revenue climbed by $2.343 billion, while fuel expenses grew by $2.218 billion.
Markets ended Tuesday with the following changes
| Security | Close | Daily move | Versus S&P 500 |
|---|---|---|---|
| American Airlines Group Inc. NASDAQ:AAL | $16.56 | up 3.24% | 1.45 pts higher |
| United Airlines Holdings Inc. NASDAQ:UAL | $132.62 | up 3.29% | 1.50 pts higher |
| Southwest Airlines Co. NYSE:LUV | $48.70 | up 3.46% | 1.67 pts higher |
| Delta Air Lines Inc. NYSE:DAL | $92.77 | up 1.29% | 0.50 pts lower |
| S&P 500 (INDEXSP:.INX) | 7,736.52 | up 1.79% | — |
Shares of American and United advanced by nearly the same amount, while Southwest’s increase was somewhat higher. Delta underperformed the index, even though it posted the industry’s highest second-quarter margin.
The impact of fuel costs is significant. An increase of one cent in fuel prices raises annual expenses by around $46 million. If fuel were to rise by ten cents and stay there, it would cost an estimated $115 million each quarter. That figure represents 25.8% of American’s operating income for the second quarter.
American’s Q2 operating bridge — values in billions of dollars, except for rates
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Operating revenue | $16.735 | $14.392 | Increase of $2.343 |
| Fuel expense | $4.881 | $2.663 | Up by $2.218 |
| Operating income | $0.446 | $1.135 | Down 60.7% |
| Operating margin | 2.7% | 7.9% | Decrease of 5.2 pts |
| Passenger yield | 22.33 cents | 19.96 cents | Up 11.9% |
| Load factor | 83.2% | 84.7% | Down 1.5 pts |
This was driven by pricing, rather than higher aircraft utilization. Capacity increased 5.4%, with load factor dropping by 1.5 points. Yield climbed 11.9%.
Chief Executive Robert Isom reported that American posted “year-over-year revenue growth of more than 16%” for the quarter. Premium passenger unit revenue increased by 13.4%. Managed corporate revenue was up 26%. American Airlines Newsroom
For most carriers, increased ticket prices covered only approximately half of the increased fuel expenses. Delta managed to recoup around 60%, while United recovered close to 50%.
Airline carriers’ Q2 fuel buffer
| Carrier | GAAP operating margin | Added fuel cost recovered | Average fuel price | FY adjusted EPS guidance |
|---|---|---|---|---|
| American Airlines Group Inc. NASDAQ:AAL | 2.7% | Close to 50% | $4.05/gallon | $(0.65) to $0.65 |
| United Airlines Holdings Inc. NASDAQ:UAL | 6.2% | Roughly 50% | $4.19/gallon | $9.00 to $11.00 |
| Delta Air Lines Inc. NYSE:DAL | 9.4% | Roughly 60% | $3.66/gallon | $6.50 to $7.50 |
Per-share ranges apply to individual companies and cannot be directly compared.
American’s margin was less than 50% of United’s and below a third of Delta’s, making every oil price change more significant for AAL investors.
Brent climbed 1.0% to $80.17 on Wednesday, following a 5% drop on Tuesday. Priyanka Sachdeva from Phillip Nova noted that the overall supply outlook still “warrants caution.” Reuters
Devon May, Chief Financial Officer at American, said the fuel-recovery rate is still changing. “It depends on the day for spot prices,” he said. Reuters
Analyst views remain positive overall, though opinions are split. Of 14 analysts surveyed, eight recommend buying, five suggest holding, and one advises selling. The consensus price target stands at $19.79, indicating a potential gain of 19.5% from Tuesday’s closing price.
Highlighted calls published following American’s July 23 earnings
| Brokerage and analyst | Rating | Target | Implied move | Date |
|---|---|---|---|---|
| UBS Group AG NYSE:UBS, Atul Maheswari | Buy | $18 | +8.7% | July 27 |
| Goldman Sachs Group Inc. NYSE:GS, Catherine O’Brien | Sell | $13 | -21.5% | July 27 |
| Jefferies Financial Group Inc. NYSE:JEF, Sheila Kahyaoglu | Hold | $15 | -9.4% | July 26 |
| Morgan Stanley NYSE:MS, Ravi Shanker | Buy | $24 | +44.9% | July 24 |
| JPMorgan Chase & Co. NYSE:JPM, Jamie Baker | Buy | $24 | +44.9% | July 24 |
| Citigroup Inc. NYSE:C, John Godyn | Buy | $19 | +14.7% | July 24 |
Short-term profit forecasts are more cautious. Analysts’ average projection for the third quarter shifted from a 16-cent profit to a 20-cent loss over the past month. The outlook for 2026 also dropped, with the consensus estimate declining from $0.39 to $0.16.
In upcoming sessions, investors are expected to monitor Brent, U.S. payrolls data set for Friday, and any adjustments to fares. American is set to release its next quarterly results on October 15.
Risks: A sustained decline in fuel prices may render current earnings forecasts insufficient. A rebound in oil prices, delays in raising fares, or softening demand would strain cash flow. As of June 30, American reported $28.9 billion in current and long-term debt along with finance leases.
The investor threshold is limited. American needs to maintain robust pricing as oil prices fluctuate. For now, AAL remains primarily a fuel play and only secondarily a margin recovery case.
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