American airlines predicted Tuesday that its focus on premium will “start to show results in 2026,” as the carrier works to catch up with far more profitable rivals and capitalize on strong demand from higher-spending customers.
The Fort Worth, Texas-based airline expects a nearly $2 improvement in its adjusted earnings per share at the midpoint from last year.
American also expects to generate 7% to 10% more revenue in the first three months of 2026 compared to 2025.
US stocks fell 7% on Tuesday.
Here’s American’s fourth-quarter performance compared to Wall Street estimates compiled by LSEG:
- Earnings per share: 16 cents adjusted versus 34 cents expected
- Income: $14 billion versus $14.03 billion expected
American reported net income of $99 million, or 15 cents per share, compared with $590 million, or 84 cents per share, a year earlier. Revenue increased by 2.5% compared to last year. Excluding net one-time items, the company reported adjusted earnings per share of 16 cents.
“American Airlines is positioned for significant upside in 2026 and beyond,” CEO Robert Isom said in a statement. “We have built a strong foundation and look forward to building on the investments we have made in our customer experience, network, fleet, partnerships and loyalty program. »
The airline also said the government shutdown had a negative impact of approximately $325 million on its fourth-quarter revenue.
“The fourth quarter hit us hard,” Isom said Tuesday morning on CNBC’s “Squawk Box.” “The government shutdown hit us, harder than others. (…) The good news is that as soon as the government shutdown passed, we saw bookings come back.”
American said this weekend’s winter storm, which marked Sunday as the largest flight cancellation day since the pandemic hit in early 2020, resulted in a 1.5 percentage point reduction in the company’s capacity forecast for the first quarter of 2026, as well as an estimated negative revenue impact of $150 million to $200 million.
American said Monday that five of its nine hub airports were disrupted by the storm, including its largest hub at Dallas Fort Worth International Airport. On a call with analysts Tuesday, Isom said the airline had to cancel more than 9,000 flights over the past four days, making it the largest weather-related disruption in its history.
The airline said passenger unit revenue was down 2.5% year-on-year, although this figure would have been positive without the impact of the government shutdown. Premium product offerings continued to perform well, with year-over-year premium unit revenues exceeding that of the main cabin in the fourth quarter.
“I like where we’re going,” Isom told CNBC. “Premium traffic is going to remain strong and our product, once again, is resonating.”
American has revamped its fleet, lounges, and food and beverages to attract customers willing to spend more on premium tickets and co-branded credit cards. Rivals Delta Airlines And United Airlines However, they are far in the lead and represent almost all of the sector’s profits.