American Airlines Revenue Jumps 19%, Losses Grow—But Signs The Premium Pivot Is Working

American Airlines brought in $2.6 billion more revenue than it did a year ago and still lost more money. The airline Third quarter revenue of $16.3 billion, up 19.3%. It lost $269 million. CEO Robert Isom says the airline’s investments are working, with “premium performance leading the way.” Seeing losses when Delta, United and Southwest made money – indeed, slightly worsening losses – makes me start skeptical. But digging into the numbers, premium actually looks like it’s continuing to improve – while non-premium hasn’t performed as well relative to cost. American’s Financial Performance, And How It Compares American Airlines Q3 2026 Q3 2025 Revenue $16.335 billion $13.691 billion Adjusted operating profit $132 million $158 million Adjusted operating margin 0.8% 1.2% Adjusted net loss $182 million $111 million Adjusted loss per share 28 cents 17 cents American actually beat the analyst consensus and earnings were inside American’s own July guidance. Q3 2026 Revenue growth Capacity growth Revenue per seat mile growth Adjusted operating margin American 19.3% 4.2% 14.5% 0.8% United 17.4% 1.3% 15.9% 6.9% Delta 15.7% 0.3% 15.4% 9.4% Southwest 21.2% −0.4% 21.6% 5.4% Delta data excludes third-party refinery sales. Southwest’s numbers retain $214 million in asset gains in its adjusted earnings. Removing those (as they should!) lowers its operating margin to 2.8%. American grew revenue faster than United and Delta, but it added more flying. After accounting for capacity growth, its revenue performance trails peers (even Southwest after removing asset gains). Interestingly, even as American invests in its product for the first time in years, nonfuel costs per seat mile excluding special items and profit sharing rose just 3%, which is far better than United and Delta. (Growing capacity faster does help spread costs.) Passenger miles grew only 1% against 4.2% more capacity. Load factor fell from 86% to 83.4%. American is actually getting more premium revenue. They’re not filling their planes with non-premium customers. CEO Robert Isom in the earnings call emphasized not being satisfied and expecting American to perform better but their fourth quarter forecast is for an adjusted loss of 50 cents to $1.10 per share, versus analyst expectations of a 52 cent loss. They’re now projecting a loss for the year of $1.00 to $1.60 loss, compared to previous expectation of break-even at the mid-point of their guidance. Premium Perfromance Continues To Improve Premium revenue grew 22.9%. It’s growing faster per seat mile than coach revenue: 18.5% vs. 14.4%. In the second quarter, premium unit revenue grew 13.4% versus 8.8% for Main Cabin. Coach revenue accelerated thid quarter Premium revenue did too And it continued growth with an advantage over coach again over 4 percentage points. American Airlines spent years taking out the products that customers will pay more for, and that American needs them to. They’re adding premium seats back in, which is where the opportunity is today. Their plan is to bring premium seating to approximately 40% of narrowbody seats including Main Cabin Extra which gives customers to buy up to between the cheapest seats and first class and will help retain elite frequent flyer card spenders now that upgrades are near-impossible. They’re also highlighting a six percentage point increase in customers buying up from Basic Economy to regular coach after removing complimentary seat selection and eligibility for upgrades for elite frequent flyers. That doesn’t factor any lost sales from having a more generous product at the basic level than competitors (indeed, Southwest’s basic fares remain more generous and both carriers are based in Dallas and compete in markets like Chicago, Los Angeles, and South Florida). Ignore the large jump in AAdvantage signups they report. That’s just passengers registering for free wifi on planes. That group won’t convert as well to credit card as previous members did. It’s more people they can develop a marketing relationship with so it’s a good thing, but there’s no reason to infer magnitude of returns from one-quarter or one-third increases in enrollment. More important is nearly 10% growth in Citi card spending. As I explained yesterday about its nearly $10 billion ambition for annual partner payments, the airline needs customers to acquire cards, keep them and actually spend on them. Better seats, usable status benefits and lounges – as well as a more robust network in New York, Chicago, and Los Angeles, all help make that happen. And customer sentiment is improving. The earnings presentation says the new 787-9 Premium had the highest customer recommendation score of any aircraft in the fleet over the summer. They claim improvement in six of seven quarters for passengers on on-time flights (so isolating product experience from operational issues). Of course, they’re also investing in things like self-service recovery and reporting net promoter score changes for disrupted passengers would be illuminating as well. Where Are The New Widebody Planes? There’s been persistent talk of a widebody aircraft order, including speculation it could be announced with earnings, though I also wondered if disappointing earnings might be a reason to separate those. CFO Devon May suggested on the earnings call that “I think we’re getting close” to the widebody order, and later “hope to wrap it up this year.” Meanwhile, asked about reducing spend and capital expenditures, May emphasized that their capital spending was modest compared to peers, that they didn’t have immediate aircraft replacement needs, and discussing costs he also repeated the mantra that their performance was going to be driven more by revenue performance than cost. That’s a shift compared to his earlier articulations. So I take it as a sign that the whole organization has publicly pledged fealty to the new premium focus. Topics on this page