Fuel Crisis Threatens American Airlines' Profitability in 2026
The soaring price of jet fuel is expected to cost American Airlines an additional $4 billion this year, the airline announced, effectively erasing its forecasted profits.
As the world’s largest carrier by passenger numbers, American Airlines warned that the fuel crisis stemming from the Middle East conflict could push the company into losses during 2026. Prior to the outbreak of hostilities, the airline had forecast profits approaching $1.8 billion.
Since the conflict began at the end of February, jet fuel prices have surged significantly. Unlike many European airlines that have hedged their fuel purchases—locking in prices months or years in advance—American carriers remain exposed to the recent price increases.
To mitigate these rising costs, the airline plans to increase fares. Its revised guidance
“assumes continued revenue improvement in the domestic entity, growth in corporate customer volumes and the ability to partially recapture elevated fuel prices.”
American Airlines reported record revenues during much of the first quarter of 2026, totaling $13.9 billion, exceeding forecasts.
Jet fuel prices in the United States currently stand at approximately $4 per gallon, slightly lower than in Europe.
Global Airline Industry Faces Rising Fuel Costs
Airlines worldwide are grappling with escalating fuel prices. Some carriers, such as Virgin Atlantic, have already introduced fuel surcharges on fares, starting at £50 extra for economy passengers on long-haul flights.
However, the broader oil supply shock may limit airlines’ ability to fully pass on these costs through higher fares.
Beyond price concerns, the guaranteed availability of fuel is a growing issue globally. UK airlines report having six weeks’ visibility of fuel supplies, which is typical, but disruptions such as the closure of the Strait of Hormuz and blockades by Iran and the US threaten longer-term fuel flow.
This week, it was revealed that UK airlines have been lobbying the government for support measures, despite publicly expressing confidence in fuel supplies. Their requests include lowering taxes and easing regulations related to night flights, airport slot retention, and passenger compensation in the event of operational disruptions caused by shortages.
Warnings of Flight Disruptions in Europe
Fatih Birol, head of the International Energy Agency, reiterated warnings on Thursday that Europe could experience a summer of flight disruptions if sufficient new fuel supplies from the US and Nigeria are not secured. Lufthansa recently cancelled 20,000 short-haul flights due to high fuel prices.
Birol stated, “In August, jet fuel demand is 40% higher than in March,” adding that the disruption had “just started.”
