Jet Fuel Price Spike Devastates US Airline Profit Projections

A recent spike in jet fuel prices has disrupted profit forecasts for major US airlines. The increase of around 20% over two weeks, driven by renewed tensions in the Middle East, has led to a re-evaluation of earnings estimates.

United Airlines now expects nearly $6 billion in added fuel expense for full-year 2026 compared to initial expectations. American Airlines saw its fuel expense jump by over $2.2 billion or 83% from last year, with the company expecting full-year adjusted earnings per diluted share to be between a loss of $0.65 and earnings of $0.65.

The volatility in crude oil prices has made it challenging for airlines to forecast their fuel costs, which are their second-highest expense after labor costs. United Airlines' CEO Scott Kirby noted that the company had initially planned to report growing earnings year-over-year but was forced to adjust its guidance due to the recent spike in jet fuel prices.