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Fuel Shock Forces U.S. Airlines to Cut Outlooks as American Warns of $4 Billion Hit

A surge in jet fuel tied to Middle East conflict is squeezing margins and pushing carriers to raise prices.

Overview

  • American Airlines, which reported results Thursday, cut 2026 guidance to a range of a 40-cent loss to $1.10 in earnings per share after a $382 million first-quarter loss and said fuel will add more than $4 billion to this year’s costs.
  • United beat first-quarter estimates but lowered its full-year target as fuel ran about $340 million higher than last year and the airline budgets for roughly $4.30 per gallon in the second quarter.
  • Alaska Air posted a $193 million GAAP loss, suspended full-year guidance, and forecast incremental second-quarter fuel costs of $600 million or more.
  • Southwest earned $227 million in the first quarter but expects second-quarter fuel of about $4.10 to $4.15 per gallon and plans roughly flat capacity as it shifts flying to stronger markets.
  • American and Alaska confirmed preliminary talks on a broader commercial partnership that could include revenue sharing, while American also reiterated it is not in any merger discussions with United.