AAL

- AAL sank 4% and DAL fell 3% as oil hit a five-month high, erasing gains and flipping AAL's full-year outlook to an adjusted loss. - JETS dropped 3% versus SPY's 0.5% decline, with AAL as the fund's largest holding at 11% of assets amplifying the sector's fuel-cost pain. - AAL's $30B debt load and a 67% surge in Q3 fuel costs leave it far more exposed to rising oil than Delta or United. - Read More: Learn 7 ways to generate income with a $1,000,000+ portfolio (sponsor) Climbing oil prices are unwinding the relief rally in airline shares that followed American Airlines Group's (NASDAQ:AAL) record quarter. American Airlines stock is at $12.06, down 4%, wiping out the previous session's rebound. At the same time, Delta Air Lines (NYSE:DAL) stock is at $76.80, down 3%. Similarly, United Airlines Holdings (NASDAQ:UAL) stock is trading at $98.62, down 3%, leaving American Airlines stock as the laggard among these three big legacy carriers. For sector context, the U.S. Global Jets ETF (NYSEARCA:JETS) is at $26, down 3%. Meanwhile, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is at $759.82, down 0.5%, highlighting airlines as a weak spot within the broad market. Under its plan for Q4 2026, American Airlines assumes jet fuel at approximately $4.70 per gallon, already meaning a $2.8 billion year-over-year increase in fourth-quarter fuel costs. Oil prices climbed to a five-month high on concerns that the U.S. conflict with Iran could flare up again, so any further climb raises the odds that expenses run past guidance. American Airlines posted record Q3 2026 revenue of $16.3 billion in the previous session, up 19.3%, according to its SEC filings, yet swung its full-year outlook to an adjusted loss of $1 to $1.60 per diluted share as fuel costs climbed. CEO Robert Isom stated, "We produced a loss in the quarter that, but for this fuel spike, would have been solidly profitable." If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life. Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor) A heavier debt load than Delta and United Airlines carry leaves American Airlines more exposed to fuel. The company reported $29.6 billion in debt and finance leases and negative stockholders' equity of $4.2 billion. Chief Financial Officer Devon May stated "the real key unlock for leverage improvement is on the earnings side," and fuel is the largest drag on those earnings. Jet fuel expense at American Airlines reached $4.63 billion in Q3, up 67.5%, as the average price climbed to $3.85 per gallon from $2.37. May called fuel "a significant headwind in the fourth quarter." Delta stock, which closed 2025 at $68.68, holds above that mark, while United Airlines stock, which ended 2025 at $111.82, trades below it. American Airlines stock, at $15.33 when 2025 ended, has fallen furthest. Within the U.S. Global Jets ETF, American Airlines is the largest holding at 11.3% of net assets as of June 30, ahead of United Airlines at 11.1% and Delta at 10.5%. That weighting ties the fund closely to how American Airlines handles the fuel squeeze. American Airlines guided its Q4 revenue up 19.5% to 22.5%, a demand environment that could buffer the cost hit if crude stops climbing. The company's premium sales rose 22.9% in Q3, while managed corporate revenue climbed 27.6%. Traders can watch for whether the oil price retreats or keeps climbing. American Airlines' management expects 2027 growth to "decelerate considerably," and plans to adjust capacity while high fuel costs persist. Investors weighing their AAL stock exposure should size their positions conservatively given the carrier's fuel sensitivity and debt load. If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life. Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor) Contact [email protected] for any questions or corrections.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Achieved 19.3% year-over-year revenue growth, the strongest non-pandemic quarterly performance in the CEO's career, though results were obscured by a $1.9 billion fuel cost spike. - Shifted commercial strategy to prioritize yield over load factor, intentionally accepting slightly lower loads to secure higher-quality revenue across all geographies. - Attributed underlying business strength to the completion of a multi-year network rebuild, specifically rebanking hubs in DFW and Philadelphia to improve operational efficiency. - Expanded premium seating capacity, which now generates approximately half of ticket revenue from only 30% of total seats, reflecting a strategic shift toward high-margin real estate. - Leveraged the AAdvantage loyalty program as a primary competitive moat, noting that enrollments in key markets like New York and Chicago grew between 35% and 65%. - Maintained industry-leading cost execution, with management highlighting that they have met or beaten CASMx guidance in 14 of the last 15 quarters. - Planned a considerable deceleration in 2027 capacity growth to better match supply with demand in a persistent high-fuel-price environment. - Anticipates that lower growth rates will exert upward pressure on unit costs (CASMx), though management intends to offset this through continued multi-year reengineering and efficiency efforts. - Focusing 2027 long-haul international growth on high-demand corporate and leisure routes, including Chicago-Tokyo and Charlotte-Barcelona. - Expects to achieve nearly $1 billion in annual run-rate savings and $900 million in working capital improvements by the end of the current fiscal year. - Committed to reaching a net debt to EBITDAR target of 3x, aligning with double-B credit metrics through earnings-driven free cash flow rather than just balance sheet engineering. - Fuel expense for the full year is projected to be more than $7 billion higher than in 2025, representing a massive structural headwind to immediate profitability. - Initiated a fleet-wide retrofit program for over 200 aircraft (777, A320, and A319) to increase premium seat density over the next three years. - Announced the installation of Starlink high-speed Wi-Fi across the entire narrowbody fleet to establish a technical differentiator in the customer experience. - Management flagged that while they evaluated assets from the Spirit Airlines liquidation, they were not successful in acquiring them, but remain opportunistic regarding future M&A. - Management explained that the primary lever for slowing growth will be stepping down aircraft utilization rather than canceling deliveries. - The slowdown is a strategic pivot from the 'reestablishment' phase of 2026 to a 'profitability' phase in 2027. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management noted that international unit revenue (up 16.4%) actually outpaced domestic (up 13.6%) in Q3. - They believe the Pacific region offers significant upside through joint business partnerships with JAL and Qantas, despite historical challenges in those markets. - Managed corporate revenue grew 28% year-over-year, marking the sixth consecutive quarter of double-digit growth. - Small and medium business performance (AAdvantage Business) saw the highest growth at 46%, which management views as a high-yield opportunity. - Management confirmed they are 'getting close' to a widebody order to replace the 777-200 fleet over the next decade. - The CEO declined to specify if the order would be split between manufacturers, only stating they hope to wrap up the campaign this year. - Management argued that airfares are only just returning to 2014/2019 levels on an inflation-adjusted basis, suggesting there is still 'value' and room for pricing power. - They emphasized that 65% of premium demand is now leisure-driven, reducing the airline's historical dependence on corporate travel cycles.

Global airline American Airlines (NASDAQ:AAL) reported Q3 2026 results exceeding the market's revenue expectations , with sales up 19.3% year on year to $16.34 billion. Guidance for next quarter's revenue was better than expected at $16.94 billion at the midpoint, 1.3% above analysts' estimates. Its non-GAAP loss of $0.28 per share was 22.6% above analysts' consensus estimates. Is now the time to buy American Airlines? Find out in our full research report. - Revenue: $16.34 billion vs analyst estimates of $16.24 billion (19.3% year-on-year growth, 0.6% beat) - Adjusted EPS: -$0.28 vs analyst estimates of -$0.36 (22.6% beat) - Revenue Guidance for Q4 2026 is $16.94 billion at the midpoint, above analyst estimates of $16.72 billion - Adjusted EPS guidance for the full year is -$1.30 at the midpoint, missing analyst estimates by 32.6% - Operating Margin: 0.7%, in line with the same quarter last year - Free Cash Flow was -$1.25 billion compared to -$872 million in the same quarter last year - Revenue Passenger Miles: up 685 million year on year - Market Capitalization: $8.10 billion "American delivered record third-quarter revenue and the strongest year-over-year revenue growth in my career, with premium performance leading the way," said American's CEO Robert Isom. "The investments we are making across the four pillars of our commercial strategy are working, and we expect another quarter of record revenue growth to close out the year. While historically high fuel prices significantly impacted our financial results, our focus remains on restoring profitability and building a stronger American for the long term. I'm grateful to the American Airlines team for making this progress possible." One of the 'Big Four' airlines in the US, American Airlines (NASDAQ:AAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights. A company's long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, American Airlines grew its sales at a 20% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded. We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. American Airlines's recent performance shows its demand has slowed as its annualized revenue growth of 6.7% over the last two years was below its five-year trend. We're wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. American Airlines also discloses its number of revenue passenger miles, which reached 67.27 billion in the latest quarter. Over the last two years, American Airlines's revenue passenger miles averaged 8.3% year-on-year growth. Because this number is higher than its revenue growth during the same period, we can see the company's monetization has fallen. This quarter, American Airlines reported year-on-year revenue growth of 19.3%, and its $16.34 billion of revenue exceeded Wall Street's estimates by 0.6%. Company management is currently guiding for a 21% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 10.6% over the next 12 months. Although this projection implies its newer products and services will fuel better top-line performance, it is still below the sector average. ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you're unstoppable. These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE. Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. American Airlines's operating margin has been trending down over the last 12 months and averaged 2.7% over the last two years. The company's profitability was mediocre for a consumer discretionary business and shows it couldn't pass its higher operating expenses onto its customers. This quarter, American Airlines's breakeven margin was 0.7%, in line with the same quarter last year. This indicates the company's overall cost structure has been relatively stable. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions. Although American Airlines's full-year earnings are still negative, it reduced its losses and improved its EPS by 49.1% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability. In Q3, American Airlines reported adjusted EPS of negative $0.28, down from negative $0.17 in the same quarter last year. Despite falling year on year, this print easily cleared analysts' estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast American Airlines's full-year EPS will flip from negative $0.37 to positive $0.12. It was good to see American Airlines beat analysts' EPS expectations this quarter. We were also glad its revenue guidance for next quarter slightly exceeded Wall Street's estimates. On the other hand, its full-year EPS guidance missed and its EPS guidance for next quarter fell short of Wall Street's estimates. Overall, this was a softer quarter. The stock traded down 4.6% to $11.76 immediately after reporting. The latest quarter from American Airlines's wasn't that good. One earnings report doesn't define a company's quality, though, so let's explore whether the stock is a buy at the current price. We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.

American Airlines Group Inc (NASDAQ:AAL, XETRA:A1G) reported record third-quarter revenue of $16.3 billion, up 19.3% year on year, but rising fuel costs pushed it to an adjusted net loss of $182 million. The airline's fuel expense increased by $1.9 billion, or 67.5%, compared with the same period last year, with an average price of $3.85 per gallon weighing heavily on profitability. It also recorded a generally accepted accounting principles (GAAP) net loss of $269 million, equivalent to $0.41 per diluted share, while its adjusted loss was $0.28 per share. The adjusted loss was only $71 million greater than in the third quarter of 2025, despite the additional $1.9 billion fuel burden, highlighting the strength of the US carrier's underlying revenue performance. Premium revenue increased 22.9% year on year, while revenue from Main Cabin passengers rose 19.5%, reflecting stronger demand and increased spending on higher-value travel products. Total unit revenue, a measure of revenue generated per unit of available capacity, increased 14.5%, supported by domestic passenger growth of 13.6% and international growth of 16.4%. Managed corporate revenue rose 27.6%, marking the sixth consecutive quarter of double-digit growth, while enrolments in the AAdvantage loyalty programme increased 27.4%. Premium passenger unit revenue grew 18.5%, outpacing the 14.4% increase recorded in Main Cabin, as American continued to expand premium seating and invest in its customer experience. The airline also reported one of the strongest unit cost performances among network carriers, with adjusted cost per available seat mile, excluding fuel and certain other items (CASM-ex), increasing 3%. American expects the pressure from fuel costs to intensify in the fourth quarter, forecasting an average price of approximately $4.70 per gallon based on the forward fuel curve on 19 October. At that price, fourth-quarter fuel expense is expected to rise by approximately $2.8 billion year on year, although the company projects revenue growth of between 19.5% and 22.5%. The airline also expects network growth to slow in 2027 compared with 2026 levels because of elevated fuel prices. American ended the third quarter with $11.8 billion in total available liquidity and more than $26 billion in unencumbered assets and first-lien capacity, while maintaining its commitment to reduce debt and interest expense. The company expects to achieve nearly $1 billion in annual run-rate savings by the end of 2026 through a multiyear efficiency programme, alongside more than $900 million in working capital improvements. The results highlight American's ability to generate strong demand and grow higher-margin premium revenue, although persistently high fuel prices remain a major obstacle to restoring profitability. Shares of American Airlines were up over 3% on Thursday.

- Interested in American Airlines Group Inc.? Here are five stocks we like better. - Strong revenue growth was offset by fuel costs: Third-quarter revenue rose 19.3% to $16.3 billion, but a $1.9 billion year-over-year increase in fuel expense drove an adjusted loss of $0.28 per share. - Revenue quality continued to improve: Passenger unit revenue increased across domestic and international markets, with premium revenue up 18.5%, managed corporate revenue up 28%, and loyalty-program engagement also rising. - Fuel headwinds will pressure near-term results: American expects a fourth-quarter adjusted loss of $0.50 to $1.10 per share and a full-year adjusted loss of $1.00 to $1.60, while planning slower capacity growth in 2027 to better align supply with demand. - Flight Path to Profits: American Airlines Bets on SpaceX American Airlines Group (NASDAQ:AAL) reported third-quarter revenue growth of 19.3% from a year earlier to $16.3 billion, exceeding the high end of its guidance range, but said a sharp increase in fuel costs drove an adjusted loss of $0.28 per diluted share. Chief Executive Officer Robert Isom said fuel expense increased by $1.9 billion year over year during the quarter as the carrier paid an average of $3.85 per gallon, or $1.48 more per gallon than in the same period last year. He said the airline would have been "solidly profitable" without the fuel-price spike, while acknowledging that American was not satisfied with posting a loss. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over - Boarding Passes Now Being Issued for the Ultimate eVTOL Arbitrage "Our job now is to convert all this progress into better margins, free cash flow, and an even stronger balance sheet," Isom said. The company said it expects the benefits of its strategy and investments to become more apparent as fuel prices stabilize. Chief Commercial Officer Nat Pieper said total unit revenue increased 14.5% year over year in the third quarter, supported by growth across all geographies and cabin classes. Domestic passenger unit revenue rose 13.6%, with notable performance in New York and Miami, while international passenger unit revenue increased 16.4%. - Latin America passenger unit revenue rose 21.1%. - Atlantic passenger unit revenue increased 14.5%. - Pacific passenger unit revenue grew 11.3%. - Premium unit revenue climbed 18.5%, exceeding main-cabin unit revenue growth by more than four percentage points. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? - Sky Wars: United's Predator Play for American Pieper said the airline deliberately prioritized yield over load factor during the quarter, accepting slightly lower load factors in exchange for higher yields. He said premium products, pricing, merchandising and loyalty initiatives offer further opportunities to improve revenue quality. Premium seating accounts for roughly half of American's ticket revenue despite representing about 30% of seats, according to Isom. The company is adding premium seats through new aircraft deliveries and retrofit programs affecting more than 200 Boeing 777, Airbus A320 and Airbus A319 aircraft over the next three years. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price Managed corporate revenue increased 28% year over year, marking the sixth consecutive quarter of double-digit growth, Pieper said. He also cited a 27% increase in travel-management-company channel sales and a 46% increase in the carrier's AAdvantage Business small- and medium-business program. American forecast fourth-quarter revenue growth of 19.5% to 22.5% year over year. However, Chief Financial Officer Devon May said fuel is expected to remain a significant headwind, with the company projecting an average fourth-quarter fuel price of about $4.70 per gallon based on the forward curve as of Oct. 19. At that price, American expects fourth-quarter fuel expense to rise about $2.8 billion from a year earlier. The carrier forecast a fourth-quarter adjusted loss of between $0.50 and $1.10 per diluted share and a full-year adjusted loss of between $1.00 and $1.60 per diluted share. May said third-quarter cost per available seat mile excluding fuel and special items, or CASM ex, increased about 3% year over year, better than the midpoint of the company's prior guidance. American expects fourth-quarter CASM ex growth of 2.5% to 3.5%. The company expects fuel expense for the full year to be more than $7 billion above 2025 levels. May said American has met or beaten its CASM ex guidance in 14 of the past 15 quarters and expects nearly $1 billion in annual run-rate savings by year-end from technology, procurement and process-improvement initiatives. It also expects more than $900 million in working-capital improvements. Management said American's capacity growth will decelerate considerably in 2027 as it responds to elevated fuel costs and focuses on matching capacity to demand. Isom said the company's 2026 growth was primarily intended to rebuild and strengthen its network after it had undergrown competitors since the pandemic. He said the carrier could reduce aircraft utilization and use that time to support retrofit work and Starlink installations. American plans to install Starlink connectivity across its mainline fleet and is adding seatback entertainment on narrow-body aircraft. May said slower growth would create some upward pressure on unit costs. Historically, the company has expected low-single-digit CASM ex growth when capacity expands at a mid-single-digit rate, he said. The airline highlighted network investments at Dallas Fort Worth, Miami, Phoenix, Charlotte, Chicago, Philadelphia and Los Angeles. Pieper said the Dallas Fort Worth rebanking produced record passenger volumes, fewer missed connections and mishandled bags, and unit revenue that outpaced the rest of the system. For 2027, American plans seven new long-haul international routes, including Chicago to Tokyo and Charlotte to Barcelona. Cargo revenue increased 29% in the third quarter, and Pieper said the company sees further cargo opportunities as it expands its wide-body fleet. American expects to take delivery of 47 new aircraft in 2026 and projects capital expenditures of $4 billion to $4.5 billion. The company said it is nearing completion of a wide-body aircraft order campaign intended to replace its Boeing 777-200 fleet over the next decade, though management did not provide details on aircraft manufacturers or order structure. At the end of the third quarter, American had $11.8 billion of total available liquidity and more than $26 billion of unencumbered assets in first-lien capacity. The company expects to end the year with net debt of approximately $30.5 billion, flat with the level at the end of 2025. May said American has reduced total debt to roughly $36 billion from $54 billion during the pandemic. He said improved earnings and margins, rather than financial transactions, are the primary path toward improved leverage and credit metrics. On loyalty, AAdvantage enrollments increased 27% year over year in the third quarter, while spending on Citi co-branded cards rose nearly 10%. American also introduced a cash-and-miles booking option during the quarter, which Pieper said has produced encouraging early results. American Airlines Group Inc is a holding company whose principal subsidiary, American Airlines, provides scheduled passenger air transportation and air cargo services. The company operates a large mainline network under the American Airlines brand and offers regional service through carriers operating as American Eagle. Its services include domestic and international flights, connecting passengers through a network of hubs and focus cities. American Airlines serves destinations throughout the United States, as well as markets in Canada, Mexico, the Caribbean, Central and South America, Europe, Asia and other international regions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "American Airlines Group Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

For the quarter ended September 2026, American Airlines (AAL) reported revenue of $16.34 billion, up 19.3% over the same period last year. EPS came in at -$0.28, compared to -$0.17 in the year-ago quarter. The reported revenue represents a surprise of +0.82% over the Zacks Consensus Estimate of $16.2 billion. With the consensus EPS estimate being -$0.28, the company has not delivered EPS surprise. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how American Airlines performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Operating cost per ASM excluding net special items and fuel - Total: 14.34 cents versus the four-analyst average estimate of 14.44 cents. - Operating cost per ASM excluding net special items - Total: 20.08 cents versus the four-analyst average estimate of 20.08 cents. - Passenger load factor (percent) - Total: 83.4% versus the four-analyst average estimate of 84.4%. - Average aircraft fuel price including related taxes - Total: 3.85 $/gal compared to the 3.79 $/gal average estimate based on four analysts. - Passenger revenue per ASM - Total: 18.47 cents versus 18.37 cents estimated by four analysts on average. - Total revenue per ASM - Total: 20.25 cents versus 20.13 cents estimated by four analysts on average. - Available seat miles - Total: 80.68 billion compared to the 80.32 billion average estimate based on four analysts. - Yield - Total: 22.15 cents versus the three-analyst average estimate of 21.9 cents. - Fuel consumption - Total: 1,204.00 MGal compared to the 1,202.66 MGal average estimate based on three analysts. - Revenue- Passenger: $14.9 billion compared to the $14.82 billion average estimate based on five analysts. The reported number represents a change of +19.5% year over year. - Revenue- Other: $1.16 billion versus $1.21 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +15.2% change. - Revenue- Cargo: $274 million versus the four-analyst average estimate of $260.97 million. The reported number represents a year-over-year change of +29.3%. View all Key Company Metrics for American Airlines here>>> Shares of American Airlines have returned -8.4% over the past month versus the Zacks S&P 500 composite's no change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Airlines Group Inc. (AAL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

American Airlines (AAL) expects to record a loss this year as elevated fuel prices continue to weigh on profitability, despite better-than-expected third-quarter results. The air carrier said Thursday it now expects an adjusted loss of between $1 and $1.60 per share for 2026, compared with the previous guidance of a $0.65 loss to $0.65 in earnings. The consensus on FactSet is for a non-GAAP loss of $1.03. For the ongoing quarter, American Airlines expects fuel expenses to increase by approximately $2.8 billion on an annual basis. In the previous three-month period, fuel costs surged by $1.9 billion, or 68% year over year. Last week, jet fuel's average price rose 1.2% from the week before to $192.44 per barrel, according to data published by the International Air Transport Association. Global energy prices have surged this year as conflicts affecting major crude-producing regions, including the Middle East, have disrupted energy supplies. Fuel "will remain a significant headwind" in the fourth quarter, Chief Financial Officer Devon May said during a conference call, according to a FactSet transcript. As of Oct. 19, American Airlines expects an average fuel price of about $4.70 per gallon in the quarter, nearly double what it paid a year earlier, the company said in its earnings release. The airline reported an adjusted loss of $0.28 a share for the September quarter, widening from a $0.17 loss the year before, but better than the Street's view for a non-GAAP per-share loss of $0.36. Revenue climbed 19% to $16.34 billion, surpassing the average analyst estimate of $16.21 billion. Shares of the company were up 3.2% in Thursday trade, reducing its year-to-date loss to about 18%. Chief Executive Robert Isom said on the call that the third-quarter topline performance was the company's "strongest quarterly revenue growth" of his career. "Unfortunately, the significant increase in fuel prices more than offset that strength," Isom said. Total revenue per available seat mile, a key measure of unit revenue, rose 15%. Capacity was up 4.2%. American Airlines expects to post an adjusted loss of $0.50 to $1.10 for the current quarter, with revenue to grow by 19.5% to 22.5%. The Street is looking for a non-GAAP loss of $0.52 and sales to increase by 19%. Capacity is pegged at 5.5% to 6.5%. "We're focused on achieving profitable, sustainable growth in any environment," Isom told analysts on the call. "And given today's elevated fuel prices, we now expect our growth rate in 2027 to decelerate considerably." This week, Southwest Airlines (LUV) lowered its full-year adjusted EPS outlook despite recording a stronger-than-expected third-quarter profit, while United Airlines (UAL) issued a downbeat fourth-quarter earnings guidance. Earlier in October, Delta Air Lines (DAL) slashed its 2026 earnings projections. In an emailed client note this month, Morgan Stanley said investors were likely to focus on how airlines will tackle future capacity and cost pressures amid persistently high jet fuel prices, instead of their earnings performance this season.

American Airlines AAL reported a third-quarter 2026 loss (excluding 13 cents from non-recurring items) of 28 cents per share, wider than the year-ago loss of 17 cents. However, the figure was in line with the Zacks Consensus Estimate. Results were hurt by elevated fuel expenses. Operating revenues surged 19.3% year over year to a record $16.34 billion and surpassed the consensus mark of $16.20 billion by 0.8%. Revenue growth was supported by strong premium demand, higher passenger yields and robust corporate travel. Total revenue per available seat mile increased 14.5%. Passenger revenues climbed 19.5% year over year to $14.90 billion. Cargo revenues increased 29.1% to $274 million, while other revenues advanced 15.2% to $1.16 billion. Passenger yield rose 18.3% to 22.15 cents, reflecting stronger pricing. Passenger revenue per available seat mile increased 14.6% to 18.47 cents. Revenue passenger miles grew 1%, while capacity, measured in available seat miles, expanded 4.2%. The passenger load factor (% of seats filled with passengers) declined 2.6 percentage points to 83.4%, just ahead of our estimate of 83%. American Airlines price-consensus-eps-surprise-chart | American Airlines Quote Premium revenues increased 22.9% year over year, outperforming the 19.5% rise in Main Cabin revenues. Premium passenger unit revenues advanced 18.5%, compared with 14.4% growth in Main Cabin. Managed corporate revenues jumped 27.6%, marking the sixth consecutive quarter of double-digit growth. Domestic passenger revenues rose 20.2% to $10.49 billion, supported by a 13.6% increase in passenger unit revenues. International passenger revenues grew 17.7% to $4.41 billion. Latin America revenues climbed 20.7%, while Atlantic and Pacific revenues increased 15.6% and 18.5%, respectively. Total operating expenses rose 19.8% year over year to $16.22 billion. Aircraft fuel and related taxes surged 67.5% to $4.64 billion, reflecting a 62.7% increase in the average fuel price to $3.85 per gallon. Salaries, wages and benefits increased 5.7% to $4.71 billion. Maintenance, materials and repairs rose 6.2% to $1.09 billion, while regional operating expenses increased 5.5% to $1.36 billion. CASM excluding special items, fuel and profit sharing advanced 3% to 14.34 cents. GAAP operating income declined 23.4% year over year to $115 million. The reported operating margin narrowed to 0.7% from 1.1%, as higher fuel expenses more than offset the benefits of record revenues. Adjusted operating income declined 16.2% to $132 million, while the adjusted operating margin contracted to 0.8% from 1.2%. GAAP net loss widened to $269 million, or 41 cents per share, compared with a loss of $114 million, or 17 cents, a year earlier. AAdvantage enrollments increased 27.4% year over year, while spending on the company's co-branded Citi credit cards grew nearly 10%. Commercial initiatives contributed to a 6-percentage-point increase in the upsell rate from Basic Economy to Main Cabin. American also announced plans to extend Starlink Wi-Fi installations across its entire mainline fleet, covering more than 1,000 aircraft. The carrier continues investing in premium lounges, seatback entertainment and fleet modernization. Its narrowbody retrofit program is expected to increase premium seating to 40% in the coming years. AAL ended the third quarter with $11.8 billion in total available liquidity. Cash totaled $1.12 billion, while short-term investments stood at $7.16 billion at September-end. Operating cash flow for the first nine months of 2026 increased to $4.54 billion from $3.37 billion a year ago. Capital expenditures and aircraft purchase deposits totaled $2.73 billion. The company repaid $5.35 billion in long-term debt and finance leases while issuing $5.93 billion of long-term debt. For the fourth quarter, AAL expects revenues to increase 19.5-22.5% year over year, with capacity growth of 5.5-6.5%. CASM, excluding special items, fuel and profit sharing, is projected to rise 2.5-3.5%. Management expects fourth-quarter adjusted loss between 50 cents and $1.10 per share. The Zacks Consensus Estimate is currently pegged at a loss of 40 cents per share. The outlook assumes an average fuel price of approximately $4.70 per gallon and a $2.8 billion year-over-year increase in fuel expenses. For full-year 2026, American Airlines anticipates adjusted loss ranging from $1 to $1.60 per share. The Zacks Consensus Estimate is currently pegged at a loss of 94 cents per share. Given elevated fuel prices, the carrier expects network growth in 2027 to slow from 2026 levels. American Airlines has a Zacks Rank #4 (Sell) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Delta Air Lines DAL reported third-quarter 2026 earnings (excluding 57 cents from non-recurring items) of $1.72 per share, missing the Zacks Consensus Estimate of $1.80 by 4.44%. Earnings increased year over year despite sharply higher fuel costs and rising non-fuel expenses. Adjusted revenues climbed 16% year over year to $17.59 billion but missed the consensus estimate of $17.74 billion by 0.9%. Broad demand strength and healthy yields lifted adjusted total revenue per available seat mile, or TRASM, 15%, while premium and diversified revenue streams continued to expand. Alaska Air Group, Inc. ALK reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company had reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum. Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion by 0.1%. Revenue per available seat mile, or RASM, rose 11.7%, supported by strong yields, premium demand and loyalty revenues. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Airlines Group Inc. (AAL) : Free Stock Analysis Report Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, Oct. 22, 2026 - Vice President Investor Relations - Neil A. Russell - Chief Executive Officer - Robert D. Isom Jr. - Chief Commercial Officer - Nathaniel Pieper - Chief Financial Officer - Devon May Operator: Thank you for standing by, and welcome to American Airlines Group's Third Quarter 26 Earnings Conference Call. Currently, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press 11 on your telephone. To remove yourself from the queue, press 11 again. I would now like to hand the call over to Neil A. Russell, vice president Investor Relations. Please go ahead. Neil A. Russell: Thanks, Katie, and good morning, everyone. Welcome to the American Airlines earnings conference call. On the call with prepared remarks, we have our Chief Executive Officer, Robert Isom our Chief Commercial Officer, Nathaniel Pieper and our chief financial officer, Devon May. After our prepared remarks, we will open the call for analyst questions followed by questions from the media. To get in as many questions as possible, please limit yourself to 1 question and 1 follow-up. Before we begin, please note that today's call contains forward looking statements including statements concerning future events, costs, forecast of capacity, and fleet plans. These statements represent our predictions and expectations of future events but numerous risks and uncertainties could cause actual results to differ from those projected. Information about some of these risks and uncertainties can be found in our earnings news release that was issued earlier this morning Form 10-K for the year ended 12/31/2025, And subsequent quarterly reports on Form 10-Q. Unless otherwise specified, all references to loss per share are on an adjusted and diluted basis. Additionally, we will be discussing certain non GAAP financial measures which exclude the impact of net special items. A reconciliation of those numbers to the GAAP financial measures is included in the earnings news release and investor presentation each of which can be found in the Investor Relations section of our website. A webcast of this call will also be archived on our website. The information we are giving you on this call this morning is as of today's date, and we undertake no obligation to update the information subsequently. Thank you for your interest in American and for joining us this morning. With that, I will turn the call over to our CEO, Robert Isom. Robert D. Isom Jr.: Thanks, Neil, and good morning, everyone. American's third quarter revenue grew 19.3% year over year to $16.3 billion. Above the high end of our guidance. Excluding the years following the pandemic, that is the strongest quarterly revenue growth of my career. Unfortunately, the significant increase in fuel prices more than offset that strength, Higher fuel added $1.9 billion to our costs in the third quarter. Nearly 70% more than we paid during the same period last year. We produced a loss in the quarter that, but for this fuel spike, would have been solidly profitable but short term pressures notwithstanding. Moving in the right direction and with urgency. We are not satisfied with the loss no matter the reason, and we will do better. The work we are doing now is laying the foundation for solid profitability as we move to 2027. Our confidence comes from the strength we see in the underlying business. Bolstered by encouraging results from our commercial initiatives and delivering on our commitment even as higher fuel prices obscure some of that progress in our reported results. We said we would elevate the customer experience, and we are. You have seen our announcements, modernizing our fleet, installing Starlink on our entire narrowbody fleet, expanding seatback entertainment to our narrow body aircraft, adding premium amenities, creating and updating lounges, and more. We said we would rebuild our network, and we have. We grew in Miami and Phoenix and are investing in Charlotte. We rebanked our DFW and Philadelphia operations, producing meaningfully stronger operational and financial performance. And we have reestablished ourselves in Chicago. And we are restoring our presence in Los Angeles over time. that is competitive growth we needed to do. At the same time, we are focused on achieving profitable sustainable growth in any environment. And given today's elevated fuel prices, we now expect our growth rate in 2027 to decelerate considerably. We said we would grow premium revenue, and we have. Premium generates roughly half of our ticket revenue on only about 30% of our seats. And we are adding more premium seats with every new aircraft in retrofit. This is the most profitable real estate on our planes, and these moves position us well as demand for premium continues to grow. And finally, we said we would lead in loyalty, and we are. AAdvantage enrollments and spending on our cobranded credit cards are up year over year, and the AAdvantage program remains 1 of our strongest competitive advantages. The US economy remains strong. Supported by healthy employment, rising household incomes, and significant wealth accumulation. Consumers continue to prioritize travel, and recent yield strength is allowing airlines to regain our historical share of the travel wallet. In the near term, our focus is on what we can control. We continue to have industry leading cost performance. The efficiency efforts we prioritize are producing meaningful savings that will benefit us well beyond this year. Our premium product investments are paying off both now and in the future. Our year over year revenue growth has accelerated every quarter this year, and we expect that momentum to continue in the fourth quarter. With revenue up 19.5% to 22.5% year over year. And we will adjust our capacity to support profitability as high fuel cost persist. American is taking the right actions for long term success. Our job now is to convert all of this progress into better margins, free cash flow, and an even stronger balance sheet. We expect the benefits of our strategy and the investments to become increasingly apparent especially as fuel prices stabilize. Of course, none of this happens without the American Airlines team. And I want to thank all of our team members for taking care of our customers and each other. And with that, I will turn it over to Nathaniel. Nathaniel Pieper: Thank you, Robert. The work we have done across the commercial organization is resonating with customers. And it showed up in our third quarter results. Total unit revenue increased 14.5% year over year with strength across every geography and every cabin. Domestic passenger unit revenue increased 13.6% year over year, with notable strength in New York and Miami. Internationally, passenger unit revenue increased 16.4% year over year. Latin America led the way, up 21.1%, followed by the Atlantic, at 14.5% and the Pacific up 11.3%. We were deliberate in how we managed revenue during the quarter. We prioritized yield over load factor, proactively securing meaningfully higher yields in exchange for slightly lower loads. We see opportunities to further improve revenue quality through pricing, premium products, merchandising, and loyalty. And are taking advantage, especially in this high fuel cost environment. Now let's go through each of our 4 commercial priorities. First is to elevate the customer experience. We now have enough scale to more consistently deploy our world class product. Our new Boeing 787-9 premium aircraft finished the summer with the highest NPS of any aircraft in our fleet. With 11 flying and another 19 on the way, our NPS scores will continue to rise as we introduce them further into the network. And across the system, net promoter scores for on time flights have improved in 6 of the last 7 quarters. In addition to the Starlink installations and seatback entertainment that will greatly enhance the customer experience in the air, giving us a hard product that will lead the industry, we are improving our premium ground game too. We will open 10 lounges through 2027, and have additional investments planned across our network including the largest Admirals Club in our system, in Charlotte. We are also investing in our digital experience across the board. Customers will see this as we manage disruptions better and deliver more timely information. And we are already seeing improvements in our mishandled baggage rate, and customer misconnections, among other customer focused metrics. Second is to grow the global network. Dallas Fort Worth is our epicenter. Following this year's rebank, DFW handled record passenger volumes in the quarter. with significantly fewer misconnections, fewer mishandled bags, and unit revenue that outpaced the rest of the system. Beyond DFW, we are building stronger schedules for local customers, in our hubs. Especially Chicago, Miami, Philadelphia, and Phoenix. These travelers tend to be higher yielding and a better schedule is how we earn more of their business. Internationally, our Latin America franchise, anchored by our Miami hub, remains 1 of the strongest parts of our network. Our long haul international growth for 2027 is focused, with 7 new routes, including Chicago-Tokyo for our corporate customers and Charlotte-Barcelona for high demand leisure travel. The network is creating value beyond the passenger business too. Cargo revenue increased 29% year over year in the third quarter, and we see future growth as we expand our wide body fleet. Third is driving premium revenue. Premium unit revenue increased 18.5% year over year. Outperforming main cabin unit revenue by more than 4 points. Expanding our premium seating volume with new deliveries and retrofit programs, which include more than 200 aircraft across our 777, A320 and A319 fleets over the next 3 years, is already bearing fruit. Corporate demand remains strong, and American is capturing meaningful share as our managed corporate revenue increased 28% year over year our 6th consecutive quarter of double digit growth. And we are improving our revenue quality as we deliver more product choices demonstrated by a 6 point increase in the upsell rate from basic economy to main cabin. Finally, loyalty. The AAdvantage program is a differentiator for American, and we intend to keep it that way. Enrollments were up 27% year over year in the third quarter, with growth of 35% to 65% in New York, Los Angeles, and Chicago. During the quarter, we launched an enhancement for customers to use a combination of cash and miles for flight bookings, and the early results are encouraging. Spending on our Citi cobranded card during the third quarter increased nearly 10% year over year, and we see opportunity for even better performance in our expanded partnership with Citi going forward. To close, we are delivering on our commercial strategy. Centered on customer experience, network, premium, and loyalty. We are encouraged by the progress and optimistic about continued future improvement and the revenue opportunity ahead. I will now hand it over to Devon to walk through our financial performance and outlook. Devon May: Thank you, Nathaniel. Our third quarter results reflect strong commercial and cost execution in a very challenging fuel environment. We reported an adjusted loss of $0.28 per diluted share, ahead of the midpoint of our guidance range. The biggest factor in the quarter was fuel. We paid $3.85 per gallon. A dollar and 48 more per gallon than the same period last year. Which increased fuel expense by $1.9 billion year over year. For the full year, we now expect fuel expense to be more than $7 billion higher than in 2025. We continue to deliver on what we can control in this environment. Third quarter CASMx increased approximately 3% year over year, better than the midpoint of the guidance range we provided in July. And we have now met or beat our CASMx guidance in 14 of the past 15 quarters. For the full year, we expect to lead the network carriers in the spread between year over year unit revenue and CASMx growth. That cost performance is not a 1 quarter result. Our multiyear reengineering efforts focused on technology investments, procurement excellence, and process improvements that drive efficiencies throughout the business are working. By the end of this year, we expect to have achieved nearly $1 billion in annual run rate savings and more than $900 million in working capital improvements through these efforts. Turning to the outlook. Demand and pricing trends remain strong across the network, and we expect fourth quarter revenue to grow 19.5% to 22.5% year over year. Continuing the momentum we saw in the third quarter. Fuel will remain a significant headwind in the fourth quarter. Based on the forward curve as of October 19, we expect an average fuel price of approximately $4.70 per gallon in the quarter. Nearly double what we paid a year ago. At that price, we expect fourth quarter fuel expense to be approximately $2.8 billion higher year over year. We expect fourth quarter CASMx to increase 2.5% to 3.5% year over year. And we are guiding to an adjusted loss per diluted share of between $0.50 and $1.10. For the full year, we now expect an adjusted loss per diluted share of $1 and $1.60 Our revenue performance and cost execution remain on track, And when fuel prices stabilize, we expect them to drive meaningful margin expansion. Turning to fleet and capital expenditures. This year, we expect to take delivery of 47 new aircraft, and expect $4 billion to $4.5 billion of capital expenditures. We are making good progress on our fleet retrofit programs which support our strategy to expand premium seating improve customer experience. Finally, an update on the balance sheet. We ended the third quarter with $11.8 billion of total available liquidity, and more than $26 billion of unencumbered assets and first lien capacity. We now expect to end the year with net debt of approximately $30.5 billion which is flat to where we closed 2025. We remain committed to reducing debt, lowering interest expense, and reaching our target of 3x net debt to EBITDAR in line with double-B credit metrics. Now I will turn it back over to Robert for closing remarks. Robert D. Isom Jr.: Thanks, Devon. In summary, we have rebuilt the network. Invested in the customer experience, expanded our premium product offerings, and strengthened our AAdvantage loyalty program reinforcing the fact that we are a premium global airline. With those investments now in place, we are seeing the benefits in our revenue performance. At the same time, we are not satisfied with our financial results, We expect America to perform better regardless of the external environment. Our focus now is on translating the commercial progress we are seeing into stronger margins and improved profitability. We are confident in the direction of the business, but we recognize that, ultimately, we will be measured by our results. that is the standard we are holding ourselves to. Operator, please open the line for questions. Operator: 11 on your telephone. To remove yourself from the queue, you may press 11 again. To allow everyone the opportunity to participate, you will be limited to 1 question and 1 follow-up. Please standby while we compile the Q&A roster. Our first question comes from the line of Catherine O'Brien of Goldman Sachs. Your line is open, Catherine. Catherine O'Brien: Good morning. Thanks for the time. You noted that 2027 capacity is expected to slow from 2026 given elevated prices, which I think is very prudent. I realize delivery schedules are still fairly fluid post pandemic versus history. But your deliveries are set to step up into 2027. What will be the offsets to get the slower growth? Is that retirement gauge utilization? And forgive me, but any additional color on how we should translate what a considerable slowdown means, like, in percentage point ranges? Thanks. Robert D. Isom Jr.: Thanks, Catherine. Hey. I will just start with this. American, our growth in 2026 has all been about reestablishing our network. I think everybody knows that we considerably undergrew our network competitor. Competitors, you know, since the pandemic. And we are really pleased that we are in a position now where we have Chicago reestablished and have been able to flesh out the hubs in Philadelphia and Phoenix and a little bit of growth in Miami. As we take a look at next year, yes, we are we are taking into account the high price of fuel. And we are gonna be adjusting appropriately. First, first order of business there is just you know, aircraft utilization. We can we can step that down quite a bit, and we will use that, to help us with our reconfiguration lines and Starlink Wi-Fi. Installs, and that is a great place to start. The rest of it, our aircraft deliveries are largely weighted towards the back end, but we are gonna be really conscious of making sure that we match, capacity with demand. And the kind of things that we take into account certainly, price of fuel will certainly take into account GDP. And make sure that we have a competitive network. Catherine O'Brien: Okay. Great. And maybe just as my related follow-up, you know, as growth slows, how will that impact CASMx trends? Should we expect that to be more pressured year over year? Or really just like any high level algo you would point us to on the relationship between capacity growth and CASMx fuel? Thanks for the time. Devon May: Hey, Catherine. it is Devon. We have talked in the past that with capacity growth in the mid single digit range, we would expect CASMx growth to be low single digit Obviously, as we reduce our growth rate, that will put some upward pressure on our unit cost, but some we are really good at, and we will continue to drive efficiencies throughout the business. But yeah, lower growth rates will drive some impact to our to our unit cost. Operator: Thank you. Our next question comes from the line of Jamie Baker of JPMorgan Securities. Please go ahead, Jamie. Jamie Baker: Hey. Good morning, everybody. So, you know, probably for Nathaniel, we have never debated or derided the breadth of your domestic network. Just yesterday, United even acknowledged that fact, and yeah, I am sure you are aware they do not pay you a lot of compliments these days, but you know, now the push at American is obviously to bolster the international foot But these were also, particularly in the Pacific, some of the very first routes that you cut during COVID. So my assumption is they were challenging then, and they could be challenging now. I guess my question is, will not the international push, at least initially, caused the margin gap to worsen or put differently, what. what is different this time with going back into those markets? Operator: Jamie, thanks for your question. Nathaniel Pieper: This business tells you to have a tough skin, so you do not count on compliments from many competitors over time. Look. Our capacity growth in 2026 is really to reestablish our hubs. And domestically, that is where you saw us allocate our resources, and we think that is been successful. it is interesting, though, that our in the third quarter, our international unit revenue outpaced our domestic. And so you know, we are a premium global airline. And as we focus on growth going forward, you know, whether it is in the Atlantic with our great joint business there and our Heathrow franchise, it is been very successful. Latin America through Miami and terrific. And then the Pacific in and of itself, we have got 2 really good joint businesses and 2 great joint businesses partners out there, Dallas and Los Angeles to Haneda. Strong results in concert with JAL. You have seen us announce for 2027, Chicago, Tokyo, for American, and JAL will continue to fly that also. Then Oceana, our great partner, Qantas, in joint business there, Pleased with the way that we are working together with them. And I think the foundation that we have got with international partners, Alaska partnership on the West Coast, help us feed that too. We think there is great opportunity for us to expand in The Pacific over time. Jamie Baker: Okay. Makes sense. And then just thinking about the premium push, and granted we are in a high fuel environment at the moment, but I personally fly the United CRJ550 with some regularity, and American is obviously long. RJs I know there are some scope nuances, but have you ruled out doing a lower density premium centric, you know, E170 or something like that? Nathaniel Pieper: Hey, Jamie. You know, if you look at our regional fleet today, it is it is pretty high premium as it sits right now. The E175s have 12 premium seats. We have a whole lot of other dual class regional jets between the CRJ 700, the CRJ900s, and the E170s that have a really nice premium footprint. We have looked at a few different LOPAs that will allow us to add some more premium seating there, but for the most part, the RJ fleet offers a lot of premium seating today, and we like where we are at. Operator: Thank you. Our next question comes from the line of Ravi Shanker of Morgan Stanley. Your line is open, Ravi. Ravi Shanker: Great. Thanks. Good morning, everyone. So not asking for 2027 guidance at all, but if you but you already spoke of the CASMx algo in the new low growth environment. How do you think about RASM versus load factor in 2027? And can you remind us again if there are any specific drivers of idiosyncratic RASM for you guys next year in addition to industry wide jet fuel pass through? Robert D. Isom Jr.: Thanks, Ravi. Look. We are sitting down and taking a look at we are gonna do for 2027 right now. You will have more about that as we get to the first quarter. As I have said, our bias in terms of capacity is to the downside. In regard to what we are doing is all about improving revenue performance, specifically unit revenue performance, And as Nathaniel said in his comments, it is directed around our 4 pillars. And we believe that there is significant upside there. We are going to be the best in the business at efficient capacity production. And the investments that we are making whether it is elevation of our customer experience, the network that is now fully fleshed out, especially our drive to premium revenue and finding ways for customers to find value and to pay more, and leading in loyalty, that is what is going to be the driver for American And we think that, you know, right now, there is more upside in American given, where we stand in terms of those investments. Ravi Shanker: Great. that is really helpful. And maybe just a quick follow-up. Is this new lower growth algorithm only as long as we have a high fuel environment? Or is that the new normal for you guys? Robert D. Isom Jr.: No. We are always going to be making sure that we are matching our capacity to demand and doing that in a profitable way. there is obviously some things that we had to do that are going to be beneficial long term with our network this past year. that is the reason that we have the growth, and we are gonna be lapping some of that growth as we get into next year. But at the end of the day, our interest is improve. Is improving profitability, driving margins, and ultimately, the capacity that we do deploy is going to be focused on our assets and where we can, generate the best margins. Thanks. Operator: Thank you. Our next question comes from the line of Atul Maheswari of UBS. Your line is open, Atul. Atul Maheshwari: Good morning. Thanks a lot for taking my question. 1 of your peers talked about the ability to get to 100% of fuel recapture next year. Assuming you have a similar objective, the question is, what would you need to do from where you are today to get there? Is there room for industry price to go up further? Should fuel remain at these levels? Or realistically, at this point, capacity management is the major lever given all the price increases that have already been passed through by the industry. Robert D. Isom Jr.: So Atul, thanks for the question. Look, in this environment, profitability for all carriers is under pressure. And we are going to, you know, make sure that we react to the marketplace And in terms of you know, the value that is that is out there, we are just now getting back to you know, airfares that on an inflation-adjusted basis. So where they were in 2019 and 2014, So we know that there is value in the product today. And in terms of the ability to hold on to that and push it further, I think the fuel price increase that we have experienced has just been a catalyst to allow us to realize that there is value. Now where we go from here it is going to be all about how we monetize the investments that we are making in our product. And from a premium perspective, I see great things, in terms of dynamics. In the past, that would have all been, you know, a corporate related trend. But now there is so much, leisure premium that is driving that. I think it is almost 65% of our premium business now. it is really a sign that people want to take care of themselves. And we are gonna make sure that we have a product that meets them where they wanna fly. Atul Maheshwari: Got it. And then just a quick on the fourth quarter revenue performance. Can you provide some color on expectations by various regions? And is there any expectation for trend change for any region relative to what you saw in third quarter? Nathaniel Pieper: Yes. Q4 revenue, obviously, pleased with our third quarter performance, and we see a sequential increase going forward into the fourth quarter. From an entity perspective, we see international performance continuing to be terrific, and we see international unit revenue to exceed domestic again in Q4 as it did in Q3. Operator: Thank you. Our next question comes from the line of Tom Fitzgerald of TD Cowen. Thomas Fitzgerald: Hi, everyone. Thanks so much for the time. Curious where things stand with corporate demand and your share of corporate traffic within the indirect channels and how some of your conversations are going with accounts across your network and then what we should be thinking about for maybe outside of. In that area in 2027? Nathaniel Pieper: Tom, thanks for the question. Your corporate sales performance, really strong in third quarter. Managed corporate is up 28%. Success in the TMC channel is up 27%, and maybe most exciting, our small and medium business performance what we call AAdvantage Business, was up 46% You guys know this, but yields on all of those 3 channels are really attractive, and we are pleased with our performance there. And as we look forward into 2027, just see continued goodness coming American's way. And it is all related to the products that we are putting on the shelf. They are attractive to folks. Just through our. All of our priorities, whether it is network, all the customer experience we have made, driving premium revenue in our sales team, and then lastly, our loyalty program. So all working together, and this is great feedback from extremely discerning customers to what we are putting out there is attractive. Thomas Fitzgerald: Nat, thanks so much. that is that is really great. And then I guess just as a follow-up on the fleet you guys have been evaluating a wide body order. I am just curious holistically, as you go into the next round of labor CBAs, just how are how are thinking about the right mix of mainline and regional? I know looking backwards, the. Your regional. Your scope advantages have been a major lever for you guys. But I am just wondering, just given a lot of the changes in regional economics over the last 5 years, if the current mix is optimal and maybe there is any ways to kind of dial that around in the years ahead. Thanks again for the time. Devon May: Sure. On the widebody side, we. We have been working on a campaign there for the past, 6 or 7 months. I think we are getting close. And as you know, this allows us to replace the 777-200 fleet in the next decade. And have some additional growth in addition to the, you know, 19 or so 8 sevens we have coming on and the options there. You know, mainline versus regional, the economics have changed a bit, but we still really like our regional performance. It just served these small and medium sized communities perfectly. What will change over time, though, are just the aircraft that we operate. You know, some of the smallest airplanes are out of production. Embraer continues to do a fantastic job for us, and that is the only manufacturer out there. For that size of aircraft. So the mix of that fleet will change over time. I do not expect the overall size of that fleet to grow too much, although there may be some growth over the years on the large side. But right now, we are we are really pleased with the economics of the regional fleet, happy with where we are at, and the mix probably does change slightly going forward, but not a huge amount. Operator: Thank you. Our next question comes from the line of Duane Pfennigwerth of Evercore ISI. Please go ahead, Duane. Duane Pfennigwerth: Hey. Hey. Good morning. Excuse me. Thank you. Welcome the shift in body language on capacity. Just several follow ups. Wonder if you can flesh that out a bit. How long we need to wait before we see it. And as we just look at maybe 3Q or the trends you are seeing into 4Q, what geographies do you think need that the most? Robert D. Isom Jr.: Thanks, Duane. Look, as we go out into the fourth quarter, a lot of what you are seeing in terms of our growth is just of where we have made investments so far. You will see a little bit more of that as we move into the first quarter. But beyond that, we have more or less lapped growth that we have focused on for competitive purposes. And so as you move out into 27, that is where you are going to see the reductions. Duane Pfennigwerth: Okay. And then maybe just a related follow-up. If you think about the opportunity for seasonally shaping your capacity, which should help margins. Maybe you feel like you are doing this already, but is there anything structurally different about American versus your network peers that limits this? And maybe where you would score yourselves on that journey? Thank you. Robert D. Isom Jr.: Thanks, Duane. And on that, we are working on that as we speak. But 1 of the things we have seen is the fourth quarter actually been with higher demand than we had the past. October has been a really significant benefit to the network. We are gonna continue to make adjustments. We are really conscious of making sure that we have a network that appeals to the highest yielding customers. And from that there is some things that we have to do on a really consistent basis And so you will probably see the schedule, you know, level out more throughout the time as opposed to you know, a lot of the peakiness that maybe you would seen in the past. Operator: Thank you. Our next question comes from the line of Scott Group of Wolfe Research. Your line is open, Scott. Scott Group: Hey. Thanks. Good morning. So if we look at Q3 relative to other network airlines' best yield performance, but biggest drop in load. I guess, why do you think we saw that outcome? And how do we think about Q4? And then I guess I never thought I would be the 1, like, questioning an airline you know, lowering capacity, but you know, Q4, you are gonna have capacity up 6% and RASM up 14%. So, like, there is at least some degree of, like, decoupling of pricing and capacity. Like, what is 1 or 22% capacity instead of 3% or 4% next year? Like, what is that actually unlock for you? Analyst: From a pricing standpoint? Nathaniel Pieper: Hey, Scott. it is Nathaniel. there is, like, 9 questions in there, so I am gonna start with the first 2. Listen, we actively, in the third quarter, prioritized yield over load factor. And we are pleased with the way that worked out with our 19.3% growth above the high end of our guide. You know, American traditionally has been a leader in load factor. And as we looked at our performance relative to our peers, really identified yield improvement as a top priority, and that is partially what is driven. And you have seen the way that we have scheduled the airline focusing on rebuilding our hubs and chasing yield from that perspective and willing to accept marginal load factor minutiae from doing that. We obviously monitor that trade off extremely closely. And felt good about where that played out. As we look forward to Q4, again, good capacity growth lined up, and we will adjust that as it goes. But a unit revenue perspective, we see that as being healthy as well. We will continue to prioritize yield the way that the economy is playing out. As Robert mentioned in the script, I think I did too, you know, our premium product and our premium performance continues to be really strong, which drives you to let's go secure yield, and that. that is been the right approach for us. Scott Group: Yeah. I mean I mean, I guess, like, the second part of the question was just, like, what is the. Is the relationship between capacity and RASM changing, or is this just a temporary thing and, like, there is no way to, like, actually decouple it? Or is this just about. it is less capacity, like, cutting some unprofitable routes? And if it is, I gotta think that like, there is a lot of them. Like, maybe. it is like, is there a chance capacity could be down next year? Robert D. Isom Jr.: Hey, Scott. Thanks for that. Again, 1 of the reasons that we are seeing the revenue performance that we are is because that we have actually built back our network in a way that is appealing to customers. So we are not. that is. We are not gonna decouple that from all the other work that we are doing. As we take a look into next year, as I said before, you are gonna see our growth decelerate. And with that, we are gonna be able to actually know, really fill in, some of the capacity that we put out. And, no doubt, Nathaniel and team are going to be able to make good use of that The supply demand dynamics of the business there is absolutely that aspect that we have to manage. As well as the drive to premium products. We are gonna be really sensitive to making sure that, our capacity does not get out in front of demand. Thanks. Operator: Thank you. Our next question comes from the line of John Godyn of Citi. Your line is open, John. John Godyn: Hey, guys. Thanks for taking my question. Robert, I just wanted to kind of plug into your kind of bigger picture thinking on you know, the shape of the industry and American's role in it. We have had what there may be a case that the industry is kind of 1 you know, decent M and A deal away from an industry that really takes it to the next level. You have experience integrating large airlines successfully over many years. And I am just curious if there is a state of the world where American takes a more proactive view on M and A Maybe you could just kind of brainstorm on that a bit. Robert D. Isom Jr.: Thanks for the question. I will just start with this. American has always been a leader in the business in finding new and creative ways to make sure that our customer have the best network available to them. Nathaniel talked a little bit earlier about our partnerships. The joint businesses, we pioneered those. We have more than anyone else. And I think that they are absolute things that we are going to look to build on in the future. As we grow, it is gonna be in conjunction with JAL. And with Qantas and with IAG and with Qatar. So really pleased with that As well, you have known that we have been very creative in trying to find ways to partner. And so whether it is the West Coast International Alliance that we have with Alaska, that I think that there is a lot more that we can do. You have seen that we are intent on bringing them into the Atlantic joint business as well as the Pacific joint business. I think that it will be very beneficial for their customers and ours. We are going to be opportunistic. We are gonna be mindful and going to be active in ways that improve our network as we go forward. John Godyn: That makes a lot of sense. And we are in a domestic as well where some of the low cost carriers are struggling in different ways. And that may create opportunities We saw an example of that earlier this year, obviously, with Spirit. Does that create opportunities for you? And maybe we can discuss that a Yeah. Robert D. Isom Jr.: We will see. Spirit, their eventual bankruptcy filing and liquidation, you know, we took a look at some of those assets. Were not successful in getting those. But we will keep our eyes open on any others that may have issues. Look. We have been a great of the things I pride myself in, and I know the airline has been just great at it, We are fantastic partners. there is no doubt that, American has the best network from a North American perspective. And that has enabled us to partner in ways that continue to drive our reach across the globe. So you are gonna continue to see us make sure that we have just incredible strength within The US and North America, and that is gonna be something is very appealing and I think going to be a driver of our growth and profitability long into the future. Operator: Thank you. Our next question comes from the line of Andrew Didora of Bank of America. Your line is open, Andrew. Andrew Didora: Hi, good morning, everyone. Thanks for taking the questions. Maybe first 1 for Devon or if Robert wants to chime in. Just on kind of capital spend, capital allocation in this environment. Now are we at the point, just given where fuel prices are, where you maybe begin to think about CapEx differently. You know, are there areas to cut or kind of reduce spend in order to preserve some, you know, to drive some free cash flow, or is that really not part of the thought process yet? Devon May: Well, as we slow capacity, it something we can look at. But, you know, right now, we really like the economics of the aircraft that are coming our way. We do not have massive CapEx requirements right So we do not have any fleet retirements. So, there is no CapEx replacement needs. We have a guide out there for this year with to $4.5 billion of total capital expenditures. It might step up slightly next year, but it is still well below our run rate needs well below our peer set. So we feel really good about the investments we are making. There may be some trimming around the edges, but for the most part, the investments we are making support our revenue initiatives, and we expect to drive margin. Andrew Didora: Got it. Understood. And maybe for Nathaniel, just thinking about you know, you have been in the seat for a little bit now. Just bigger picture, you know, you are you are investing in LAX, you know, growing your Pacific gateway. This is historically been a smaller part of your network. Now when you think of it. Think out over the next you know, couple of years, what are the areas of the. Of strength that you wanna continue to lean on? And then maybe some areas of weakness or geographies that you are, you know, that are smaller today that you would really like to improve. Thanks for taking the questions. Nathaniel Pieper: Thanks, Andrew. Yes, it is been 11 months, and it is hard to believe that it is only been that. I actually feel really good about the commercial strategy that we have and really building on, you know, what was in place when I came and took the job. I think American's been really clear in articulating our 4 priorities. it is network, it is customer experience, it is premium revenue, and its loyalty. And think not only have we made considerable strides on each of those, we have got initiatives in the pipeline that are gonna continue to deliver revenue performance, continue to help us close the gap versus our peers and drive margin expansion. So excited about it. I am excited about the next few years and really you know, continue to push American forward together. Operator: Thank you. Our next question comes from the line of David Vernon of Bernstein. Your line is open, Ravi. David Vernon: Hey. Good morning, everybody. So Devin, I am just wondering if you and the Board are talking more about sort of the balance sheet. I think the promise has been we can close the margin gap, pay down our debt, and kinda get to a little bit more of equal footing from a credit perspective. But, obviously, the fuel crisis that we are going through right now is postponing that. Are you kind of having more conversations about different ways to maybe recapitalize the company, whether it is a transaction with, the credit card program or other efforts to try to kinda alternatively repair the balance sheet just given the impact of fuel? Devon May: Thanks. Yeah. I. We have made a ton of progress on the balance sheet. Like, you look where we were 3 to 4 years ago, midst of the pandemic, we had $54 billion of total debt. We have reduced that to around $36 billion today. We have less total debt today than we did 10 years ago. We have less net debt today than we did 10 years ago. So the balance sheet, we are gonna continue to make progress on. But the key to us driving improved credit ratings is earnings. And so while you can try to do some different transactions to improve our debt levels, the real key unlock for leverage improvement is on the earning side. And that is where we are focused We are focused on driving margin improvement. We know it is going to come from the revenue side of the business. When we do that, limited CapEx requirements are gonna allow us to produce meaningful free cash, and then we will use that continue to improve the balance sheet. But our focus right now is on margins. David Vernon: Alright. Thanks for that. And then, you know, the decision to get a little closer to American on the joint venture side, could you talk a little bit, Robert, maybe about the strategic rationale for that? And other things you can do to kind of strengthen that relationship? It seems like you guys are drifting a little bit closer together, I do not wanna turn this into a consolidation question because I know that is not something that you are gonna address. But you know, when you think about the motivation, the intention, the benefits that Alaska maybe brings to that JV, if you could kinda give your perspective on that, that would be helpful. Robert D. Isom Jr.: Perspective on this is just Alaska has been a great partner. And they complement a lot of what we do in a in a in a very great way. They have been part of OneWorld now for a few years. Super happy about that. And, you know, my relationship with Alaska, you know, dates back, you know, well prior to the pandemic, and it is always been about trying to find ways that we can serve our customers in a better way. And to that end, I think we have really been able to develop a great partnership West Coast International Alliance is doing what we had hoped. And really looking forward to bring Alaska into the joint businesses as time goes by here in the next year. Operator: Thank you. Our next question comes from the line of Sheila Kahyaoglu of Jefferies. Your line is open, Sheila. Jack Ewell: Hi. This is Jack Ewell on for Sheila. Just wanted to. You have announced a flurry of customer experience investments this year across Wi-Fi to return feedback and continued fleet upgrades, among others. When you contemplate these investments, can you just talk about the return thresholds you look at once reaching maturity, whether it is an ROIC target or maybe an expected RASM slash yield uplift? Devon May: Yeah. Obviously, these types of investments do not have a direct return. What they do is they support all of our commercial initiatives. And so in some cases, there are like, obvious indirect returns but it does not cover all of the capital or all of the operating expense that goes with it. And so for the most part, you are expecting a uplift on yields or an improvement in market share. And that is how we view it. We view it from a broader lens than just kinda 1 investment or 1 initiative at a time, but we think we are taking the right steps and making the right steps to drive closure in this revenue gap that we have today. Jack Ewell: Absolutely. that is really helpful. And, so I would just kind of follow-up there, in May, you announced, you know, Starlink would be added to 500 narrow bodies, and then, you know, quickly rolled it out that you are gonna go across the entire fleet. I am just wondering what informed that decision to go across the whole fleet, and do you generally view Wi Fi installations as a race to the finish in order to maintain and attract the higher yielding, you know, loyalty members across, you know, the you major brand-loyal airlines in the US. Robert D. Isom Jr.: I will just take a step back. We laid out our pillar to elevate our customer experience. And whether it is what we are doing, you know, on the ground with lounges some of the new concourses and terminal developments, that are going on throughout our system, the drive to put premium seats, the flagship suites on our aircraft, the aircraft that we are bringing in, you know, all of that is designed to make sure that we have a hard product and also the amenities that customers really want. 1 of the things we know, we have been a leader in satellite based Wi Fi having it on more of our aircraft than any other airline for some time now. We know that our customers value connectivity and that is something that we are confident is going to be table stakes. And, you know, right now, I think it could be a differentiator for American. We are gonna move as fast as we can to get Starlink installed on our entire fleet of narrow bodies wide body aircraft over the next year or so. And super excited about that. And I know that our customers will value that greatly. Operator: And we will be taking media questions. Media, please press 11 on your telephone to ask a question. Again, at this time, we will be taking media questions. Thank you. Our first question comes from the line of Alison Sider of Wall Street Journal. Your line is open, Allison. Allison, please make sure your line is unmuted. If you are on a speakerphone, if you-- oh, sorry about that. Alison Sider: Sorry. Sorry. Hi. I was curious about fees. Given sort of the trade offs you are thinking about between pricing and filling seats, if there is any further thought or opportunity you are seeing to increase things like bag fees or other fees or if you expect more increases there across the industry? Robert D. Isom Jr.: Hey, Alison. Nathaniel can chime in here. Look. We do not talk about pricing or fees, you know, specifically. Look. We are all about making sure our customers get great value in the products that we offer. And I tell you, it is at every end of the spectrum. So we wanna make sure that our customers in business class have that live flat flagship suite, want to make sure that we have the best lounges. And, you know, it goes down, even to those that are the most, you know, price conscious, budget minded, And so for our basic economy fares, we are really intent on making sure that our customers have just a great product. You know what? We offer incredible value. You know, we do not charge, you know, $75 for a carry-on bag. for that product like some of our competitors do. We wanna make sure that our customers are finding real value throughout the spectrum of products that we offer. And we are really, you know, pleased with the investments we are making and what it will do, you know, ultimately for our customers and the loyalty that we will get for that too. Alison Sider: And then I guess on the changes that you have made in your approach to involuntary denied boarding, I mean, seems like that is really been paying off and been successful in getting those rates down Like, why is that not something you chose to tackle earlier? Nathaniel Pieper: Alison, I guess the new guy gets to answer that question. that is fine. Listen. I think from a customer experience perspective and what we wanna deliver and making American the airline of choice, it really is just something that is terrific to promote, and I know our teammates at the airport feel so much better about it, and certainly the proposition that we are delivering to customers and having that So choosing just to focus on the way forward, the technology that is in place for it, you know, we feel really good about how that rolls out and where it is leading American. Operator: Thank you. Our next question comes from the line of Leslie Josephs of CNBC. Your line is open, Leslie. Leslie Josephs: Hi. Good morning, everyone. The passenger counts, loads are down, not just for you, but other airlines. At what point does that worry you or become an issue to your results? And then secondly, do you think you have a chance that these fuel prices or similar to be profitable in 2027? Thanks. Nathaniel Pieper: Leslie, I will take the it is Nathaniel. I will take the first 1. Listen, as I said earlier, we are actively prioritizing yield versus load factor. And really happy as we see it. It fits right in with the premium investments that we are making. It fits right in with a lot of the merchandising and the value that we are delivering to different customers at different price points. So we feel good about that, and we are we are gonna continue to prioritize that as we go into the fourth quarter. Robert D. Isom Jr.: Obviously, that is a relationship that you watch closely. And regarding profitability, of course, we think we can be profitable next year. And that is that is driven by what we have seen, you know, this year. We have had fuel expense now grow $7 billion over the course of the year. You know? But for that, we would be solidly profitable. We would be, you know, certainly 1 of the companies that have had the greatest percentage growth in profitability, you know, year over year, but for, you know, the dramatic increase in fuel. You know, fuel prices, whether they stay higher, they move lower, it is really about the volatility that we have been dealing with. And as fuel prices stabilize, I am confident we are gonna be able to manage our supply and demand to make sure that we are in balance. And then on top of that, all the investments that we are making in terms of driving revenue are gonna show up. And, on top of the industry leading performance in terms of efficiency and cost management, that is going to lead to profitability. So I have great confidence in our ability to get back to profitability. Everything that we see in terms of how we are performing versus others, and then also the revenue performance, which is which is the primary focus, leads us to believe that we have a great chance to get back profitability and really be the airline with the most upside for our investors. Thanks. Leslie Josephs: And just 1 follow-up on the widebody order You said you are really close. Are you looking at a split fleet or a split provider order or a single provider? And what is the pros and cons of each? Robert D. Isom Jr.: No real no real comment on, what we are thinking right now other than just say the campaign's going really well, and we hope to wrap it up this year. Operator: Thank you. I would now like to turn the conference back to Robert Isom for closing remarks. Sir? Robert D. Isom Jr.: Thanks, Katie, and thanks, everybody, for listening in. We are going to get back to work Thank you very much. Operator: This concludes today's conference call. Thank you for participating. 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