American and United weigh further capacity cuts as fuel prices climb

American Airlines and United Airlines are preparing to make further cuts to flight capacity if fuel prices remain elevated, according to remarks made at an investor conference hosted by Morgan Stanley.

American chief executive Robert Isom and chief financial officer Devon May described how the fuel situation is feeding into the carrier's plans. Isom said third-quarter revenue is expected to rise between 16% and 19% from a year earlier, with strength on domestic and international routes as well as in premium cabins and economy class. May said the price of fuel for the fourth quarter has climbed by about $1 per gallon against levels projected in July. At American, each one-cent move per gallon shifts quarterly costs by roughly $10 million, which May put at close to $1 billion in extra cost for the fourth quarter alone. May said American will keep adjusting capacity late in the fourth quarter in response.

The source describes the broader US airline sector as having relied on tighter supply, higher fares and resilient demand to offset rising costs tied to the war in Iran. The recent jump in energy input prices is now forcing a review of less profitable operations toward the end of the year and potentially into 2027.

United's stance, as described in the same account, puts profitability ahead of market share.