By Benny Xie
NEW YORK, April 23 (Xinhua) -- Major U.S. airlines are grappling with the severe financial impact of soaring jet fuel prices tied to the ongoing Middle East conflict, forcing multiple carriers to slash or suspend their full-year guidance despite reporting record first-quarter revenues and robust passenger demand.
American Airlines reported an adjusted first-quarter loss of 40 cents per share on Thursday, narrower than the 47-cent loss analysts had estimated. The carrier achieved a record first-quarter revenue of 13.9 billion U.S. dollars.
However, the airline flagged a massive 4-billion-dollar increase in expenses related to higher jet fuel prices, prompting it to join other major carriers in stepping back from previous full-year financial expectations.
"American delivered record revenue in the first quarter, and we're on track for another record in the second quarter," said American Airlines CEO Robert Isom. He noted that despite the volatile operating environment, the airline anticipates modest profitability for the year, assuming the current forward fuel curve holds.
Rival United Airlines took a drastic step earlier this week, heavily slashing its 2026 earnings outlook as it absorbs the energy shock. The airline now expects to earn between 7 dollars and 11 dollars a share on an adjusted basis this year, sharply down from its January forecast of 12 dollars and 14 dollars a share.
For the second quarter, United Airlines expects fuel prices to average a staggering 4.3 dollars a gallon. To mitigate the mounting costs, the airline announced plans to trim its scheduled flying capacity for the year.
United Airlines CEO Scott Kirby maintained that underlying travel demand remains strong. "Moments of uncertainty for the airline industry may also create opportunity for United," he said. "We have demonstrated quarter after quarter that we are built to withstand disruptions, and this moment is no different."
He also acknowledged that the longer this situation persists, the more confident he is that the airline can keep most of those fare increases, even if jet fuel prices eventually decrease.
"Certainly, the longer this lasts, the higher the probability goes that the pricing increases hold. And we probably won't hold 100 percent if we normalize as I told the team earlier today, and it's just my guess that if things went back to mid-February normal, I think we get to keep 20 percent of the price increase next year. I think that's going to move towards 80 percent. And every day, it's ticking up longer as this goes on," he said.
Southwest Airlines also forecasted second-quarter earnings below analyst estimates and held off on updating its full-year 2026 forecast. Southwest Airlines President and CEO Bob Jordan emphasized that while new product offerings drove double-digit unit revenue growth, the results were achieved against the backdrop of significantly higher fuel costs.
Similarly, Alaska Air pulled its full-year outlook on Monday following mixed financial results. "Offsetting some of that pressure is a strong demand backdrop, with fare increases holding," Alaska Air CEO Benito Minicucci said on the company's earnings call.
"Fuel is obviously one of the biggest costs for airlines, so when jet fuel cost rises, margins get squeezed, and that usually shows up in the form of higher fees," said Rob Suhs, vice president of global sales at Inventory Locator Service.
Amid the sector's financial turbulence, Isom said a potential merger with rival United Airlines would hurt consumers and be anticompetitive. The statement followed reports that Kirby had pitched a potential tie-up to U.S. President Donald Trump during a late-February meeting.
On Tuesday, Trump publicly opposed the idea in a media interview, saying that he does not favor a merger because both airlines are doing well. "I don't like having them merge," he said.
