Business

American Airlines Sees Strong Travel Demand from K-Shaped Economy Cushioning Fuel-Price Hit
By Reuters | 27 May, 2026

Stronger revenue, premium demand and corporate travel remains strong enough to help absorb higher oil costs thanks to the upper bar of the K-shaped travel economy, allowing the airline to stick to its full-year profit forecast.

American Airlines is sticking with its full-year profit outlook despite a sharp jump in fuel prices, CEO Robert Isom said at a Bernstein investor conference on Wednesday, as stronger revenue, premium demand and corporate travel help cushion the hit from rising oil costs.

Isom said there was "no doubt" demand had a K-shaped pattern, with higher-income travelers outpacing middle- and lower-income customers.

Still, he said travel was growing across income groups, with American about 80% booked for the second quarter, corporate travel up 13% year over year and leisure demand "incredibly" strong.

American Airlines' shares were up 2% in morning trade.

The carrier last month cut its 2026 profit forecast as jet fuel costs surged, saying it expected its fuel bill to rise by more than $4 billion this year. It forecast 2026 results ranging from a loss of 40 cents per share to a profit of $1.10 per share, down from its prior forecast for a profit of $1.70 to $2.70 per share.

Isom said the airline expected second-quarter revenue to rise 15% from a year earlier on about 5% capacity growth, implying roughly 10% unit revenue growth.

(Reporting by Rajesh Kumar Singh in Chicago and Shivansh Tiwary in Bengaluru; Editing by Gus Trompiz)