American, United, Southwest Cut Flights as Fuel Costs Surge

Post by : Saif

American Airlines, United Airlines and Southwest Airlines are cutting planned flight schedules as a sharp rise in fuel prices puts pressure on their profits.

Higher jet fuel costs have forced the three major US carriers to review routes and reduce flights that have become less profitable. Airlines are also relying on strong passenger demand and higher ticket prices to offset some of the increase in fuel expenses.

American Airlines expects the recent rise in fuel prices to add about $1 billion to its fourth-quarter costs. United Airlines has removed some flights planned for December and could make additional cuts in early 2027 if fuel prices remain high.

Southwest Airlines has already reduced its planned capacity growth for 2026 by roughly half because of higher fuel costs.

American Faces Major Fuel Cost Increase

American Airlines executives said fuel prices have risen significantly from the levels used in the company's earlier forecasts.

Chief Financial Officer Devon May said fourth-quarter fuel prices were about $1 per gallon higher than the assumption made in July. Each 1-cent change in fuel prices affects American's quarterly costs by around $10 million.

American expects to continue adjusting its flight capacity during the final part of the fourth quarter as fuel costs remain elevated.

Despite the higher expenses, Chief Executive Officer Robert Isom said the airline expects third-quarter revenue to increase between 16% and 19% compared with the same period last year.

Revenue growth has been reported across domestic and international routes, as well as both premium and economy cabins.

Read more: United and American Fight for Control at Chicago’s O’Hare Airport

United Removes Some December Flights

United Airlines is also reducing its schedule as higher fuel costs make some routes less attractive.

Chief Financial Officer Michael Leskinen said some December flights would no longer operate because their economics had weakened following the increase in fuel prices.

Further changes could come during the first quarter of 2027 if fuel costs remain high.

United is focusing on profitability and cash generation rather than maintaining maximum market share, according to Leskinen.

Travel demand has remained strong despite higher fares. United reported strong fourth-quarter bookings, while premium and corporate travel continued to perform well. Economy-class demand has also remained steady.

Southwest Cuts Capacity Growth

Southwest Airlines has also changed its plans because of the fuel shock.

The carrier had initially planned to increase capacity by around 2% to 3% in 2026. Higher fuel prices have led Southwest to cut that planned growth roughly in half.

Chief Financial Officer Tom Doxey said autumn revenue was performing ahead of expectations, helping the airline absorb some of the additional fuel expense.

Southwest has maintained its third-quarter earnings guidance despite the higher fuel bill.

Strong Travel Demand Supports Airlines

Airline executives said there has been little evidence of a major decline in passenger demand following recent fare increases.

Strong demand gives carriers more room to raise ticket prices and recover some of the additional fuel costs. At the same time, airlines are reviewing routes where higher operating expenses make flights less profitable.

The approach means carriers are reducing capacity where costs have become difficult to absorb while protecting routes with stronger demand.

Airline Shares Fall as Fuel Costs Rise

Shares of the three airlines have declined over the past month as fuel prices have increased.

American Airlines shares have fallen about 14%, while United Airlines shares are down around 15%. Southwest Airlines has declined roughly 11% over the same period.

Higher fuel expenses remain a key concern for the industry because fuel is one of the largest operating costs for airlines.

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