American Airlines Says 2027 Growth Will 'Decelerate Considerably' As Fuel Costs Top $7 Billion Over 2025
CEO Robert Isom says capacity is biased to the downside next year after American spent 2026 rebuilding its hubs.
American Airlines expects its growth rate in 2027 to "decelerate considerably", CEO Robert Isom said on the company's third-quarter earnings call Thursday, as fuel prices stay elevated. Full-year fuel expense is now expected to run more than $7 billion above 2025, CFO Devon May said on the call.
A Downside Bias On Capacity
Asked by a Morgan Stanley analyst about 2027, Isom said, "our bias in terms of capacity is to the downside." He said the company is working through its 2027 plans now and "you'll have more about that as we get to the first quarter."
A Goldman Sachs analyst asked him to put "considerably" into percentage terms. Isom gave no range. He said the first lever is aircraft utilization, which American can "step that down quite a bit," using the time for cabin reconfigurations and Starlink Wi-Fi installs. Deliveries are weighted toward the back end of the year, and capacity will be matched to demand, fuel prices and GDP.
Isom told an Evercore ISI analyst that American has "more or less lapped" the growth it pursued for competitive reasons, so the reductions arrive in 2027. A Wolfe Research analyst noted fourth-quarter capacity of about six alongside unit revenue up 14, and asked what a cut to one or two percent growth would unlock. Isom said the revenue performance cannot be decoupled from the network rebuilt this year, and that growth will decelerate.
May said slower growth will put upward pressure on unit costs. With mid-single-digit capacity growth, he said, the company has expected low-single-digit growth in unit costs excluding fuel.
Fuel Swamps A Record Revenue Quarter
American, which flies scheduled passenger and cargo routes through hubs including Dallas/Fort Worth, Chicago, Miami, Philadelphia and Phoenix, reported third-quarter revenue up 19.3% to $16.3 billion, above the high end of its guidance. Higher fuel added $1.9 billion to costs, and the airline posted an adjusted loss of 28 cents a share. It paid $3.85 a gallon, $1.48 more than a year earlier.
For the fourth quarter, May guided to revenue up 19.5% to 22.5% and an adjusted loss of 50 cents to $1.10 a share, assuming fuel of about $4.70 a gallon. That would lift fourth-quarter fuel expense about $2.8 billion. For the full year he now expects an adjusted loss of $1 to $1.60 a share and year-end net debt of about $30.5 billion, flat with the end of 2025. Liquidity ended the quarter at $11.8 billion.
Rebuilt Hubs, Then A Pause
Isom said 2026 growth was about re-establishing a network the airline had "considerably undergrew" since the pandemic, pointing to Chicago, Philadelphia, Phoenix and Miami. CNBC reported American is the fourth major U.S. airline to cut its 2026 outlook this month on jet fuel prices.
Isom told CNBC's Leslie Joseph the airline can be profitable in 2027, saying that but for the $7 billion fuel increase it would be solidly profitable this year.
Isom said American will have more to say on 2027 when it reports first-quarter results.
Sources
- American Airlines (AAL) Q3 2026 earnings — CNBC
- American Airlines posts record Q3 revenue of $16.3B amid fuel-cost surge, sees wider EPS loss (AAL:NASDAQ) — seekingalpha.com
- American Airlines’s (NASDAQ:AAL) Q3 2026: beats on revenue, quarterly revenue guidance slightly exceeds expectations — Yahoo Finance
- American Airlines CEO Robert Isom on Q3 results: Rise in fuel costs is the main issue — CNBC
- American Airlines' profit grounded by soaring fuel costs (AAL:NASDAQ) | Seeking Alpha — seekingalpha.com
