American Airlines lowered its earnings forecast for 2026 on Thursday, citing a sharp rise in jet fuel prices that could push the carrier close to breakeven despite strong revenue and sustained demand for air travel. The airline reported record income and increased fares earlier this year, but the surge in fuel costs threatens to erode those gains. Following the announcement, American’s shares fell by 8%.

The rise in fuel expenses is a widespread challenge across the U.S. airline industry. A Reuters analysis shows that combined fuel costs at major carriers including Delta Air Lines, United Airlines, American, Southwest Airlines, and Alaska Air have increased by nearly $8 billion compared to the same period last year. This represents a substantial jump from the roughly $1.2 billion increase observed in the first quarter of 2026 compared to 2025.

While all airlines are experiencing rising fuel costs, American Airlines appears particularly vulnerable due to relatively thinner profit margins. Unlike its competitors Delta and United, which have historically maintained stronger profitability, American faces a more limited ability to absorb higher expenses without impacting overall earnings. This development presents a challenge to CEO Robert Isom’s ongoing strategy to revitalize the airline.

Despite maintaining robust passenger demand and elevated ticket prices, the escalation in fuel prices has significantly narrowed American’s expected profit margin. Industry analysts note that this pattern underscores the volatility airlines face amid fluctuating commodity prices and heightened operational costs.

In contrast, Delta and United have so far been better equipped to manage the increased fuel expenditures, benefiting from more substantial reserves and diversified cost controls. However, the sector-wide pressure from fuel expenses remains a critical concern for airline profitability as the industry continues its recovery from earlier pandemic disruptions.

American Airlines’ updated forecast signals the broader risks that energy price swings pose to the aviation market, even as travel volumes show resilience. The company and competitors will likely continue to monitor fuel markets closely as they navigate ongoing economic and operational uncertainties throughout 2026.