American Airlines says soaring price of jet fuel will cost it $4bn this year

Soaring jet fuel prices from Middle East conflict threaten to push American Airlines into a $4bn loss this year, wiping out earlier profit forecasts.

Soaring jet fuel prices from Middle East conflict threaten to push American Airlines into a $4bn loss this year, wiping out earlier profit forecasts. | Contesto: cronaca

Punti chiave

  • American Airlines says soaring price of jet fuel will cost it $4bn this year

Contesto

American Airlines, the world’s largest carrier by passenger volume, announced today that the skyrocketing cost of jet fuel will add an unexpected $4bn to its expenses this year, effectively erasing projected profits and raising the specter of a net loss for 2026. The airline attributed the fuel crisis directly to the escalating US-Israel conflict with Iran, which has disrupted global oil supplies and sent refining costs surging. Prior to the onset of hostilities, American had forecast a profit of nearly $1.8bn for the year, a target now deemed unattainable as fuel prices continue to climb. The warning came as part of the airline’s quarterly earnings update, in which executives described the fuel spike as a “seismic shock” to the industry. American Airlines said it is now exploring a range of measures to offset the additional costs, including raising fares on domestic and international routes. However, analysts caution that higher ticket prices could dampen demand, particularly among leisure travelers already strained by inflation. The carrier’s admission underscores the broader economic ripple effects of the Middle East conflict, which has already sent crude oil prices above $100 per barrel and strained global supply chains. Industry experts note that American Airlines is particularly vulnerable to fuel price volatility due to its massive fleet and heavy reliance on long-haul routes, which consume more fuel per passenger mile. The $4bn cost increase represents a roughly 30% jump in the airline’s annual fuel bill, based on previous spending levels. While competitors such as Delta and United have also reported rising costs, American’s exposure is amplified by its higher proportion of domestic flights, where fare increases are harder to pass on to consumers without losing market share. The fuel crisis comes at a precarious time for the airline industry, which was still recovering from pandemic-era losses and labor shortages. American had been banking on a strong summer travel season to boost revenues, but the conflict has upended those expectations. The carrier’s stock fell 6% in after-hours trading following the announcement, reflecting investor concern that the...

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Categoria: cronaca