Fuel costs are squeezing U.S. airlines from every angle right now. And for American Airlines, the jet fuel bill got a lot bigger in Q1.
The Fort Worth-based carrier burned through $341 million more in jet fuel during the first quarter of 2026 than it did in the same stretch a year ago.
That’s a painful hit even as the airline managed to post record revenue weeks and grow total revenue by 10.8% year-over-year (YoY) in the March quarter.
And here’s the thing: it could get worse before it gets better.
AAL stock is down 14% in 2026
Jet fuel doesn’t spike in a vacuum. The conflict in the Middle East has been a major driver of the recent price surge, pushing fuel prices to a peak of $4.69 per gallon.
That’s more than double what it was in early February, according to the Argus US Jet Fuel Index.
Down almost 14% in 2026, American Airlines (AAL) stock isn’t alone in absorbing this blow.
According to a Sherwood report:
- Across the six biggest U.S. airlines, the combined fuel bill jumped by roughly $1.2 billion in Q1 compared to 2025.
- United Airlinespaid $340 million more, and Delta Air Lines absorbed an extra $196 million.
- Alaska Air and Southwest Airlines were also hit, adding $115 million and $107 million to their fuel tabs, respectively.
- JetBlue rounded out the group with $62 million in additional costs.
The problem is that Q1 only included one month of the conflict’s full impact. Airlines are now bracing for a much harder Q2, with carriers broadly expecting to pay more than$4.26 per gallon — a jump of over 50% from the first quarter average.
For AAL, Chief Financial Officer Devon May said the company is planning for fuel at approximately $4 per gallon in Q2 based on the forward curve as of April 20.
How American Airlines plans to fight back
Airlines have a few tools to offset a fuel spike: raise fares, cut flights, or hike ancillary fees. American Airlines is leaning on all three.
American Airlines CEO Robert Isom said the company expects to recapture 40% to 50% of the higher fuel costs in Q2.
That figure is expected to climb to 75%-85% in Q3, and potentially into the 90s by Q4, assuming fuel prices hold and capacity continues to decline.
American has already trimmed capacity by suspending Tel Aviv and Doha services, pulling back in Chicago, and reducing other marginal flying.
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Still, Chief Commercial Officer Nat Pieper noted that deeper near-term cuts don’t make financial sense given strong demand heading into peak summer travel.
The hikes that airlines are pushing through are real, and passengers are already feeling them. According to Deutsche Bank’s analysis, the industry may need to raise average fares by about 17% to cover fuel costs at current prices fully.
Beyond base fares, the pressure on ancillary fees is mounting. Three of the six largest U.S. carriers have already raised checked bag fees in recent weeks, and industry observers say that may just be the start.
With profit margins thin and fuel costs surging, airlines are looking at every possible revenue stream, from seat assignments to boarding group pricing, to plug the gap.
AAL stock expects to be profitable in 2026
Despite ongoing headwinds, American Airlines isn’t throwing in the towel on the year.
Even with fuel expense tracking more than $4 billion higher YoY, Isom said the airline still expects to turn a profit in 2026.
More Airlines:
- Spirit Airlines desperately seeks help from an unexpected source
- JetBlue makes a boarding change some may like
- Another airline shuts down for summer, cancels all flights
The midpoint of the company’s full-year earnings guidance sits at $0.35 per diluted share.
For Q2, American Airlines is guiding for a range spanning a $0.20 loss to a $0.20 gain.
“We are also updating our full year outlook to reflect our current revenue expectations and the forward fuel curve. The midpoint of the full year earnings guidance is $0.35 per share, approximately flat to 2025 despite jet fuel prices increasing fuel expense by over $4 billion year-over-year,” May stated.
The company ended Q1 with nearly $11 billion in available liquidity. Total debt fell to $34.7 billion, the first time it’s been below $35 billion since mid-2015.
That financial cushion matters when you’re navigating a fuel shock this size.
Revenue momentum is also real.
- American loggednine of the highest revenue intake weeks in company history during Q1.
- Managed corporate revenuejumped 13% YoY.
- Premium cabin paid load factors hit record highs, running roughly 10 points above 2019 levels.
- AAdvantage loyalty enrollments were up 25% YoY.
The fuel crisis is a serious headwind. But American Airlines is betting its commercial momentum, and some strategic capacity discipline can carry it through.
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