American Airlines AAL reported second-quarter 2026 earnings (excluding 4 cents from non-recurring items) of 15 cents per share, down 84.2% year over year but well above the Zacks Consensus Estimate of 3 cents. The result represented a 400% earnings surprise.

Operating revenues rose 16.3% to a record $16.74 billion and surpassed the consensus mark of $16.70 billion by 0.2%. Revenue growth was strong across all entities and cabins, with premium, Main Cabin, domestic and international all increasing meaningfully year over year. Total revenue per available seat mile increased 10.3%.

AAL’s Passenger Revenues Gain on Higher Pricing

Passenger revenues climbed 15.9% year over year to $15.21 billion. Cargo revenues increased 29.7% to $273 million, while other revenues advanced 17.9% to $1.25 billion.

Passenger yield rose 11.9% to 22.33 cents, reflecting stronger pricing. Passenger revenue per available seat mile increased 10% to 18.59 cents. Revenue passenger miles grew 3.6%, while capacity, measured in available seat miles, expanded 5.4%.The passenger load factor (% of seats filled with passengers) declined 1.5 points to 83.2%.

American Airlines Price, Consensus and EPS Surprise

American Airlines price-consensus-eps-surprise-chart | American Airlines Quote

American Airlines Sees Broad Cabin and Regional Strength

Premium passenger unit revenues increased 13.4% year over year, outperforming an 8.8% rise in Main Cabin unit revenues. Managed corporate revenues advanced 26%, marking the fifth consecutive quarter of double-digit growth.

Domestic passenger revenues rose 17.1% to $10.73 billion, aided by a 10.6% increase in passenger unit revenues. International passenger revenues grew 13.2% to $4.49 billion. Pacific revenues jumped 24.6%, Atlantic revenues increased 12.8% and Latin America revenues improved 11.4%.

AAL Faces a Sharp Increase in Fuel Expense

Total operating expenses rose 22.9% year over year to $16.29 billion. Aircraft fuel and related taxes surged 83.3% to $4.88 billion, reflecting a 77.1% increase in the average fuel price to $4.05 per gallon.

Salaries, wages and benefits increased 5.9% to $4.64 billion. Maintenance, materials and repairs rose 10.8% to $1.03 billion, while regional operating expenses increased 7.5% to $1.34 billion. CASM excluding special items, fuel and profit sharing advanced 2.9% to 13.93 cents.

American Airlines’ Margins Contract Despite Revenue Growth

GAAP operating income fell 60.7% year over year to $446 million. The reported operating margin narrowed to 2.7% from 7.9%, as elevated fuel costs outweighed the benefit of record revenues.

Adjusted operating income declined 61.7% to $453 million, while the adjusted operating margin contracted to 2.7% from 8.2%. GAAP net income totaled $71 million, or 11 cents per diluted share, compared with $599 million, or 91 cents, a year earlier.

AAL Expands Loyalty and Improves Operations

AAdvantage enrollments increased more than 30% year over year, while spending on the company’s co-branded Citi credit cards grew 8%. Changes to Basic Economy offerings and checked-bag fees contributed to a 5-point increase in the upsell rate to Main Cabin.

On-time arrival performance improved 2.8 points. The rebanking of the Dallas-Fort Worth hub reduced system misconnections by nearly 25% and helped unit revenues at the hub outperform the system average by 4 points.

AAL Maintains Strong Liquidity

AAL ended the quarter with $11.3 billion in total available liquidity. Cash totaled $1.03 billion, while short-term investments were $6.74 billion at the end of June.

Operating cash flow for the first six months of 2026 increased to $4.69 billion from $3.42 billion a year ago. Capital expenditures and aircraft purchase deposits totaled $1.63 billion. The company paid $4.65 billion toward long-term debt and finance leases while issuing $4.52 billion of long-term debt.

AAL Issues Cautious Q3 and 2026 Guidance

For the third quarter, AAL, currently carrying a Zacks Rank #2 (Buy), expects revenues to increase 16-19% year over year, with capacity growth of 3-5%. CASM excluding special items, fuel and profit sharing is projected to rise 2.5-4.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Management expects third-quarter adjusted results between a loss of 70 cents and a loss of 10 cents per share. The outlook assumes an average fuel price of approximately $3.75 per gallon and a $1.7 billion year-over-year increase in fuel expense. The Zacks Consensus Estimate for third-quarter 2026 earnings is currently pegged at 31 cents per share.

For full-year 2026, American Airlinesnow anticipates adjusted results ranging from a loss of 65 cents to earnings of 65 cents per share. Previously, the carrier had expected adjusted earnings in a range of a loss of 40 cents to earnings of $1.10 per share.

The revised outlook assumes a roughly $6 billion headwind due to high jet fuel prices. The Zacks Consensus Estimate for full-year 2026 earnings is currently pegged at 57 cents per share. Despite strong travel demand and rising ticket prices, American Airlines and other airline operators are grappling with the volatility of fuel prices, resulting in an uncertain environment.

Q2 Performance of Other Airline Companies

Delta Air Lines DAL reported second-quarter 2026 earnings (excluding 88 cents from non-recurring items) of $1.56 per share, beating the Zacks Consensus Estimate of $1.51. Earnings declined in double digits (% wise) from a year ago as sharply higher fuel costs pressured profitability.

Revenues rose on a year-over-year basis to $17.67 billion but missed the consensus estimate of $17.76 billion. Broad demand strength lifted adjusted total revenue per available seat mile (“TRASM”), 12.4%, while premium and diversified revenue streams continued to expand.

United Airlines UAL reported second-quarter 2026 adjusted earnings of $1.99 per share, down 48.6% year over year but above the Zacks Consensus Estimate of $1.92 by 3.7%.

Operating revenues rose 16% to $17.67 billion and were essentially in line with the $17.68-billion consensus mark. A 12.1% increase in TRASM and broad-based gains across premium, loyalty and cargo revenues supported the top line despite sharply higher fuel costs.

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