What Happens To American Airlines Stock If Fuel Stays High

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Fuel is the worry for anyone holding American Airlines (AAL) stock. The airline paid $3.85 a gallon in fiscal Q3 2026, up $1.48 from a year earlier. On its October 22 call, management forecast another quarterly loss and said it expects to pay about $4.70 a gallon in the fourth quarter. At the third quarter's lower price, the added fuel cost already exceeded American's operating profit many times over. If fuel stays that expensive, how much of American's profit would the fuel bill take?

American Airlines' Extra Fuel Cost Already Tops Its Profit

In fiscal Q3 2026, higher fuel added $1.9 billion to American's costs compared with a year earlier, and the airline was left with $115 million of operating income. Third-quarter revenue grew 19.3% from a year earlier, but management said the higher fuel more than offset that strength. The extra fuel bill came to about 16 times the operating income American kept.

Over the twelve months to September, American did not earn enough from its operations to cover its interest. Operating income of $1.03 billion fell short of the company's $1.66 billion of interest expense. After paying for new aircraft and other capital spending, the airline also spent $91 million more than it took in over those twelve months.

If the third quarter simply repeated for a year, American would lose about $1.1 billion. That figure is the latest quarter multiplied by four and not a forecast, and it uses the quarter's net loss of $269 million rather than its operating profit. It also assumes the third quarter's $3.85 fuel price, below what management expects for the fourth quarter.

Can American Airlines Wait Out High Fuel Prices?

American has the cash to wait. Management said the airline ended the third quarter with $11.8 billion of total available liquidity. At September 30, the balance sheet held $8.29 billion of cash and short-term investments against $37.2 billion of debt. Net of that cash, debt stood at $28.9 billion. Management also expects net debt of about $30.5 billion at the end of 2026, flat with where it closed 2025. That is above the $28.9 billion at September 30, and management did not say whether it measures net debt the same way.

You cannot yet know how long fuel stays high, and management gave reasons on both sides. The company says demand and pricing remain strong across the network, and it expects margins to expand meaningfully once fuel prices stabilize. Yet given today's fuel prices, it also expects growth in 2027 to slow considerably, and management said slower growth will put some upward pressure on unit costs. The first step in slowing that growth, management said, is aircraft utilization, which American can step down quite a bit.

On the October 22 call, American was asked whether it might repair its balance sheet through a deal, such as one involving its credit card program. Management answered that deals could help its debt levels, but that earnings are the real key to better leverage and credit ratings.

How Hard Have Shocks Hit American Airlines Stock Before?

Harder than the market. In the 2025 US Tariff Shock, American stock fell 43%, against 19% for the S&P 500. During the 2022 Inflation Shock & Fed Tightening, the stock fell 37%, while the index fell 24%. The shares have already lost 22.7% since August 5, a stretch in which the S&P 500 slipped 1.7%.

For holding through high fuel to be worth that kind of swing, American's revenue has to keep growing faster than its costs. When the company reports, expected in January 2027, the number to watch is the fuel price American pays in the fourth quarter against the roughly $4.70 a gallon management expects.

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