Airline Flight Cuts Grow as Fuel Adds $1B to American’s Costs

American says its latest fuel jump adds about $1 billion to fourth-quarter costs. United and Southwest are trimming schedules, too. Here’s what it means for your next trip.

American Airlines said it will keep adjusting capacity after its latest jump in fuel costs added about $1 billion to expected fourth-quarter expenses, joining United and Southwest in scaling back planned flights.

The three carriers laid out separate moves Sept. 16, according to Reuters via MarketScreener. United Airlines removed some flying it had planned for December, while Southwest Airlines has roughly halved the capacity growth it planned for 2026.

The airline flight cuts come with a caveat. Reuters reported that United and Southwest could trim further if fuel costs stay high, and that executives at all three carriers pointed to solid revenue or bookings.

Fuel is expected to claim a bigger slice of airline budgets this year than last. The International Air Transport Association, or IATA, forecast in June that fuel would account for 31.4% of airline operating expenses in 2026, up from 25.4% in 2025.

American CEO Robert Isom described broad strength in revenue. United Chief Financial Officer Michael Leskinen, who reported strong bookings, spelled out the carrier’s priorities at a Morgan Stanley conference Sept. 16.

“We are not flying to maximize market share. We’re flying to maximize profitability and free cash generation,” Leskinen said.

Southwest Chief Financial Officer Tom Doxey said the airline’s autumn revenue was running ahead of expectations.

Responses from passenger advocates or airline unions to the September changes did not appear in the airlines’ statements or in Reuters and AP coverage reviewed through Sept. 29.

What American Has Told Investors

In July, American forecast full-year adjusted earnings ranging from a loss of 65 cents a share to a profit of 65 cents, according to its second-quarter results.

That outlook assumed jet fuel would average about $3.75 a gallon in the third quarter, based on the July 21 forward curve, a snapshot of market prices for future fuel deliveries.

The July range was lower than the one American gave in April, when its first-quarter results forecast a loss of 40 cents a share to a profit of $1.10.

American Chief Financial Officer Devon May said Sept. 16 that fourth-quarter fuel prices had risen roughly $1 a gallon from the level assumed in July, Reuters reported via MarketScreener.

How Other U.S. Airlines Are Handling Flight Cuts and Fuel Costs

Southwest said in its July 22 earnings release that second-quarter fuel expense ran $889 million above a year earlier, with fuel costing $3.92 a gallon. At that point, it expected full-year capacity growth of about 1.5%, down from 2%.

Southwest measures capacity in available seat miles, or one seat flown one mile. Slower capacity growth is not the same as a count of canceled departures.

United started pulling back earlier. In March, it cut about 5 percentage points from its planned annual capacity, Reuters reported. Under a high-oil planning scenario laid out by CEO Scott Kirby, the airline estimated its annual fuel bill could climb by about $11 billion.

Delta Air Lines, in its April 8 earnings release, projected flat second-quarter capacity while meaningfully reducing planned growth. Reuters reported that the reduction amounted to about 3.5 percentage points from the original plan.

Alaska Air Group suspended its full-year guidance April 20. At the time, it estimated second-quarter fuel at about $4.50 a gallon, adding roughly $600 million in expense.

At Spirit Airlines, the pressure ended in a shutdown. Marshall Huebner, a lawyer for the carrier, said in court in May that higher fuel costs and a lack of available financing left the airline unable to continue, Reuters reported.

Why Jet Fuel Prices Soared

IATA’s June outlook traced the initial supply shock to the Feb. 28 closure of the Strait of Hormuz. The group estimated about 10 million barrels a day of crude supply was lost, roughly 10% of global consumption.

China also restricted exports of refined products, including jet fuel, in mid-March. Reuters reported Sept. 18 that those limits began easing in mid-July and that customs data showed record monthly jet fuel exports in August.

According to an IATA fuel briefing presented in June, global jet fuel averaged about $96 a barrel in November 2025, $188 in April and $158 in May.

The most recent weekly figure on IATA’s fuel price monitor, when checked Sept. 29, put the global average jet fuel price at $185.43 a barrel, down 4.9% from the previous week.

U.S. airlines have retreated from fuel hedging, the use of futures and options to lock in prices ahead of time, Reuters reported Sept. 3. Some European rivals carry more protection. Lufthansa reported an 86% hedge ratio for 2026, and Air France-KLM had covered about 67% of its expected 2026 consumption.

Even so, Lufthansa expects its fuel bill to overshoot. CEO Carsten Spohr said at a Sept. 28 press event in Frankfurt that the added 2026 fuel burden would exceed the 1.5 billion euros the airline flagged in August, according to Reuters. He did not give a new figure and reaffirmed operating-profit guidance of 1.7 billion to 2.2 billion euros.

What It Means for Airfares

IATA’s June forecast put 2026 airline industry net profit at $23.0 billion, down from its previous $41 billion projection, for a net margin of 2.0%. The group said higher fares were recovering only part of the cost shock. It forecast passenger demand growth of 2.1%, measured in revenue passenger kilometers, or the distance flown by paying passengers.

Demand has shaped airline decisions overseas, too. In April, Air France-KLM cut its capacity-growth outlook to 2% to 4%, from 3% to 5%, and projected its 2026 fuel bill would rise $2.4 billion from 2025.

Reuters reported via MarketScreener. that Bernstein analyst Alex Irving, in a note explaining the airline’s decision against a larger cut, pointed to “an ongoing strong earnings environment and high demand for travel.”

Brett House, an economist who teaches at Columbia Business School, said in an Associated Press report published Sept. 28 that advance scheduling and tickets already sold create a lag between shifting fuel costs and fares.

“It’s not just the level of fuel costs that is a problem or a challenge for airlines,” House said. “It’s also the volatility.”

What Travelers Can Do if a Flight Is Canceled or Changed

Which December routes United trimmed has not been independently confirmed. The U.S. Department of Transportation advises passengers to watch email, text and airline app alerts for schedule changes.

Under DOT refund rules, passengers whose flight is canceled are entitled to a refund, whatever the reason, if they decline the alternative travel and compensation the airline offers.

Significant schedule changes also qualify when passengers turn down the alternatives. Those include departures at least three hours earlier or arrivals at least three hours later on domestic itineraries, and six hours on international trips. A switch to a different departure or arrival airport, or added connections, also counts.

Travelers who accept the rebooked flight generally give up the right to a full ticket refund under those rules.

Earlier Service Cuts Reached New York

Foreign airlines serving U.S. airports have adjusted, too. In April, Air Canada said it would suspend Toronto and Montreal service to New York’s John F. Kennedy International Airport from June 1, with a stated return Oct. 25, the AP reported via ABC News. The carrier said it would contact affected customers with alternatives, and its LaGuardia and Newark service would continue.