April 23 (Reuters) – American Airlines cut its 2026 profit forecast on Thursday, as sky-high jet fuel costs driven by the Iran war eat into profit margins.
Jet fuel prices, typically accounting for about a quarter of airline operating expenses, have nearly doubled since the conflict erupted, leaving carriers squeezed between spiraling costs and tickets sold in advance at prices they cannot adjust.
Fuel prices surged as U.S.-Israeli strikes on Iran disrupted traffic through the Strait of Hormuz, a critical corridor for global oil supplies, triggering the aviation industry’s biggest shock since the COVID-19 pandemic.
In the U.S., even though demand has held steady, the cost spike has affected profit margins. Airlines have resorted to fare hikes, capacity cuts and jacking up fees for ancillary services like checked bags to mitigate some of the costs.
The carrier now expects to report between 40 cents per share loss and a $1.10 per share profit, compared with $1.70 to $2.70 profit per share forecast earlier.
The carrier reported a net loss of $382 million, or 58 cents per share for the quarter through March, compared with $473 million, or 72 cents per share, a year earlier.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Arun Koyyur)
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