American Airlines says soaring price of jet fuel will cost it $4bn this year

The soaring price of jet fuel will cost American Airlines another $4bn this year, the carrier has said, wiping out forecast profits. The airline, the world’s largest by passengers flown, said the fuel crisis from the US-Israel war on Iran could push it into losses during 2026, having forecast profits approaching $1.8bn before bombing started. The price of jet fuel has more than doubled since the conflict began at the end of February. While many European airlines have hedged their fuel, locking in a purchase price for months or years ahead, American carriers have been exposed to the price rises. The airline will aim to offset the costs with higher fares, saying its revised guidance “assumes continued revenue improvement in the domestic entity, growth in corporate customer volumes and the ability to partially recapture elevated fuel prices”. American Airlines exceeded forecasts and reported record revenues during much of the first quarter of 2026, totalling $13.9bn. Jet fuel prices in the US are slightly lower than in Europe, at about $4 a gallon. Airlines globally are facing rising fuel prices, with some such as Virgin Atlantic having already attached fuel supplements to their fares, starting at £50 extra in economy for a long-haul flight. However, faltering consumer confidence in the face of the wider expected oil shock may also mean airlines struggle to pass on widespread higher fares. Globally, the guaranteed availability of fuel, as well as price, is an increasing concern. Airlines in the UK have said they have six weeks visibility of supplies, which is the usual horizon, but the closure of the strait of Hormuz and the Iranian and US blockades has placed the longer-term flow of fuel in jeopardy. It emerged this week that UK airlines have been lobbying the government for contingency measures, despite publicly maintaining confidence in supplies. The demands include lowering taxes and easing regulations on night flights, airport slot retention and passenger compensation should shortages start to affect operations. The head of the International Energy Agency, Fatih Birol, repeated warnings on Thursday that Europe would face a summer of disrupted flights if it could not locate sufficient new supplies from the US and Nigeria. Lufthansa this week cancelled 20,000 short-haul flights owing to fuel prices, and Birol said the disruption had “just started”, adding: “In August, jet fuel demand is 40% higher than in March.”