American Airlines CEO Robert Isom said Thursday (April 23) during an earnings call that that travelers realize that in real terms, today’s prices are still lower than they were a decade ago. In addition, American and other airlines have focused on premium offerings that make travelers willing to spend more, he said.
The airline saw its fuel expense increase by $400 million year over year in the first quarter, Isom said during the call.
“Even with those headwinds, our pre-tax margin improved approximately 2 points year over year,” Isom said.
For the full year 2026, American Airlines expects higher prices for jet fuel to increase its expense by $4 billion, it said in a presentation released Thursday.
Despite that expense, the airline expects to increase its capacity by between 4% and 6% during the second quarter.
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American Airlines also plans to partially recapture elevated fuel prices and increase its revenue by between 13.5% and 16.5% during the second quarter, per the presentation.
“Moving forward, we’re working to take appropriate actions to drive revenue to offset the increases in fuel costs,” Isom said during the call. “Assuming the current forward fuel curve, we expect to be profitable in 2026.”
American Airlines Chief Commercial Officer Nat Pieper said during the call that American has incorporated revenue increases that will recapture 40% to 50% of the additional fuel expense in the second quarter and that it will increase that percentage to 75% to 85% in the third quarter and 90% in the fourth.
“Historically, airlines recover that additional fuel expense either by increasing revenue or by reducing marginal capacity,” Pieper said. “We have been encouraged so far by the pace with which revenue has been recaptured. Obviously, if fuel continues through the third quarter into the fourth quarter, we’re going to see some more broad industry capacity reductions.”
Isom said in a Thursday earnings release that the company achieved record revenue in the first quarter and expects to do the same in the second quarter. The airline’s first quarter revenue increased 10.8% year over year to reach $13.9 billion, according to the release.
Other developments in the first quarter included the January rollout of free high-speed satellite Wi-Fi, sponsored by AT&T, for members of American Airlines’ loyalty program, AAdvantage. The airline said in the release that it now offers this service on more aircraft than any other carrier.
“Connectivity in flight is critical to the customer journey today,” Isom said during the call.
AAdvantage increased its enrollments by 25% year over year during the first quarter, bringing the total number of enrollments to a record high. The airline said in a presentation released Thursday that this year’s enrollments are on track to exceed the record high it achieved in 2025.
During the call, Isom attributed this growth to the introduction of free Wi-Fi for members as well as a redesigned loyalty experience in American’s app that improve performance, clarity and engagement.
American Airlines also enhanced its app with new features that provide real-time notifications and more self-service options.
The airline’s exclusive and expanded co-branded credit card partnership with Citi took effect at the beginning of the first quarter. The companies announced in December 2024 that Citi would become the exclusive issuer of the AAdvantage co-branded card portfolio in 2026. During the first quarter of 2026, American Airlines achieved a record number of acquisitions and saw its co-branded credit card spend increase 9% year over year.
“This partnership has a significant upside as it is designed to drive long-term growth in credit card acquisitions,” Isom said during the call.
