CHICAGO, May 27 - American Airlines said on Wednesday it is keeping its full-year profit guidance even after a marked rise in fuel prices, CEO Robert Isom told attendees at a Bernstein investor conference. Isom said stronger revenue performance, solid premium demand and an uptick in corporate bookings are helping to offset the impact of higher oil costs.
Isom described demand as following a K-shaped pattern, saying there was "no doubt" that higher-income travelers are outpacing middle- and lower-income customers. He also noted, however, that travel volumes were increasing across income cohorts.
The airline reported it is roughly 80% booked for the second quarter, with corporate travel up 13% year over year and leisure demand described as "incredibly" strong. American Airlines' shares were up 2% in morning trade following the remarks.
Last month the carrier trimmed its 2026 profit forecast amid a surge in jet fuel costs, saying it expected its fuel bill to rise by more than $4 billion this year. The revised 2026 outlook ranged from a loss of $0.40 per share to a profit of $1.10 per share, down from an earlier projection of $1.70 to $2.70 per share.
Addressing near-term revenue expectations, Isom said American anticipates second-quarter revenue to increase about 15% from a year earlier on roughly 5% capacity growth, which implies approximately 10% unit revenue growth.
Context and implications
- Management is relying on stronger yields, premium travel and increased corporate bookings to blunt the effect of higher jet fuel costs.
- Demand patterns remain uneven - described as K-shaped - with higher-income travelers driving faster recovery, yet overall travel is expanding across income brackets.
- Near-term metrics provided by the airline point to notable revenue gains in the second quarter, even as fuel expense pressure prompted a prior downgrade to the 2026 profit outlook.
Market reaction
The stock moved higher in morning trading following the comments, reflecting investor focus on the airline's ability to preserve profitability amid rising operating costs.