American Airlines Group Inc. (NASDAQ:AAL) shares dipped earlier Friday, but later flattened after Delta Air Lines reported third-quarter earnings, cut its full-year guidance and detailed how it plans to absorb higher fuel costs.
- American stock is facing resistance. Why is AAL stock retreating?
Delta Cuts Its 2026 Outlook as Fuel Costs Climb
Delta reported third-quarter adjusted earnings per share of $1.72, missing the consensus estimate of $1.81. It reported revenue of $20.186 billion, beating the consensus estimate of $17.654 billion. Delta lowered its fiscal-year 2026 adjusted earnings per share guidance to $5.10 to $5.60 from $6.50 to $7.50, versus the consensus estimate of $5.59. For the fourth quarter, it sees adjusted earnings per share of $1.15 to $1.65, versus the consensus estimate of $1.51, and sales of $17.527 billion, versus the consensus estimate of $17.192 billion.
Delta Says It Can Absorb a $6 Billion Fuel Increase
Delta said its business has structural durability in a high-fuel-cost environment and that it will absorb a $6 billion increase in fuel costs. It said revenue momentum is continuing into the December quarter, with strength across all products and geographies. The fourth-quarter guidance assumes fuel at the forward curve as of Oct. 2 and includes a refinery benefit of about 40 cents per gallon, resulting in a projected all-in fuel price of about $4.25 per gallon.
Why Delta’s Report Is a Read-Through for American
American has been dealing with the same fuel pressure. It cut its 2026 outlook in July, with adjusted earnings per share guidance of negative 65 cents to positive 65 cents, after record second-quarter revenue was almost entirely offset by an 83% jump in fuel costs. Unlike Delta, American does not hedge fuel and has no refinery to offset it. Delta’s results show how a larger competitor with a refinery is planning around fuel at roughly $4.25 per gallon.
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American Shares Trade Flat
AAL Price Action: At the time of writing, American shares are trading 0.95% lower at $12.68, according to data from Benzinga Pro.
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