New York:As major U.S. airlines reported their third-quarter operating results, rising fuel costs have significantly impacted their profit margins, even amid strong travel demand and record-breaking revenues.
According to Agence Kampuchea Presse, American Airlines faced a net loss of $269 million in Q3, despite achieving record revenues of $16.3 billion. The airline's fuel expenses rose by $1.9 billion, a 67.5 percent increase, with an average fuel cost of $3.85 per gallon. The carrier anticipates paying $4.7 per gallon in the fourth quarter, nearly double the price from the same period in 2025, with fuel expenses expected to increase by approximately $2.8 billion year over year. Consequently, American Airlines has lowered its full-year outlook, forecasting an adjusted loss of $1 to $1.6 per share.
Southwest Airlines also encountered similar challenges, although its Q3 earnings exceeded Wall Street expectations. The Dallas-based airline reported a net income of $270 million, with operating revenues increasing by 21.2 percent to $8.4 billion, setting a company record for the third quarter. However, its fuel expenses rose by $821 million compared to the previous year, with a Q3 fuel cost of $3.92 per gallon, exceeding prior estimates. Southwest Airlines CEO Bob Jordan expressed confidence in the company's earnings power despite the higher fuel costs, projecting a Q4 fuel cost of approximately $4.55 per gallon.
United Airlines reported a Q3 revenue of $17.9 billion, a 17.4 percent year-on-year increase, with net income reaching $1 billion. Nonetheless, its fuel expenses surged by $1.8 billion, or 62 percent, compared to the previous year. The airline expects to pay about $4.8 per gallon for fuel in Q4, up from $3.9 in Q3, and forecasts adjusted earnings of $0.50 to $1.5 per share for the fourth quarter, falling short of Wall Street expectations.