Jet Fuel Prices Squeeze U.S. Airlines as United CEO Sees 6 in 10 Losing Money

Fuel bills at five big U.S. airline groups ran 52% above last year through September. Three carriers turned a profit last quarter; three did not. United’s Scott Kirby predicts six of 10 U.S. airlines probably will lose money in 2026.

Soaring jet fuel prices have widened the gap between profitable and money-losing U.S. airlines, and United Airlines CEO Scott Kirby predicts six of 10 U.S. carriers probably will lose money in 2026.

Five of the largest U.S. airline groups (United, Delta, American, Southwest and Alaska) reported a combined $45.7 billion in fuel expense for the nine months ended Sept. 30. That’s up 52% from about $30 billion a year earlier, according to their quarterly financial statements. Aviation Week reported the same increase on Oct. 23.

The spike followed the U.S.-Israeli war on Iran, which began in February, Reuters reported.

Kirby gave his forecast in an interview with Ryan Warner of Colorado Public Radio published Sept. 4. He repeated the estimate on the Cheeky Pint podcast published Oct. 27. He counted two privately held airlines among the 10 and did not name every carrier he expects to lose money. His estimate is a projection. The carriers have not yet reported full-year results. None of the carriers’ quarterly earnings releases directly addressed Kirby’s forecast.

Higher fares, fewer full seats

Airlines have leaned on fares rather than volume to cover the bill. Third-quarter passenger revenue at the five carriers rose nearly $8.8 billion, or 18%, while traffic grew less than 1%, Reuters reported.

American Airlines shows how that tradeoff works. Its third-quarter yield, or passenger revenue per mile flown by a paying customer, rose 18.3% to 22.15 cents, company figures show. Its load factor, the share of seats filled, fell from 86.0% to 83.4%.

The approach carries risks. Flying less raises costs per seat, and higher fares could eventually weaken demand, Reuters reported, even as executives describe demand as resilient.

“The big question that remains is how long consumer resiliency lasts,” Liam Dorsey, an analyst at Third Bridge, told Reuters on Oct. 22.

Who’s still making money

United earned $1.029 billion in the July-September quarter on record operating revenue of $17.9 billion, the airline reported Oct. 20. Its fuel expense rose $1.8 billion from a year earlier. Premium and loyalty revenue each grew 17%, and cargo revenue climbed 23%.

Profit did not mean United covered the full fuel increase. The airline recovered 72% of its added fuel costs in the quarter, below its earlier expectation of 80% to 90%, and pushed back the timing for full recovery, Skift reported.

Delta Air Lines posted net income of $756 million. Its Oct. 9 release reported $20.186 billion in operating revenue under generally accepted accounting principles, or $17.585 billion on an adjusted basis.

Diversified revenue streams made up 61% of Delta’s adjusted quarterly revenue. Premium revenue rose 18%, and payments from American Express rose 15%. Delta expects those payments to top $9 billion for the year.

CEO Ed Bastian said Delta expects roughly $4.5 billion in full-year pretax profit while absorbing a $6 billion increase in fuel costs.

Southwest Airlines quintupled its net income, to $270 million from $54 million a year earlier, its Oct. 21 release showed. Adjusted net income reached $328 million. The carrier credited its commercial overhaul, including bag fees and new product offerings, and forecast full-year adjusted earnings of $2.60 to $2.85 per share.

Who’s losing money

American lost $269 million in the quarter. It forecast a full-year adjusted loss of $1.00 to $1.60 per diluted share, its Oct. 22 release said. The airline expects fourth-quarter fuel near $4.70 per gallon and plans slower network growth in 2027. Its premium revenue rose 22.9%.

JetBlue Airways lost $257 million, or $226 million excluding special items and investment gains, the carrier said Oct. 26. It recovered about 87% of its higher fuel costs. JetBlue now expects a negative adjusted operating margin of 4.5% to 6.5% for the year, wider than its previous forecast of negative 2% to 5%, Aviation Week reported.

JetBlue, which has posted six straight years of net losses, is targeting sustained operating profitability in 2027, then at least $1 in earnings per share and positive free cash flow in 2028. Aviation Week reported the cash-flow target assumes fuel slightly above $4 per gallon in 2027 and about $3 in 2028.

“The fuel challenges the industry faces are real, but so is our progress,” CEO Joanna Geraghty said on the Oct. 27 earnings call, according to Aviation Week.

The same day, after a sharp selloff in JetBlue’s bonds and media reports that a group of creditors had hired restructuring advisers, Geraghty told Reuters the company was not planning a debt restructuring or seeking U.S. government financial support.

“We are not in talks with our creditors,” she said.

Alaska Air Group lost $147 million and forecast a full-year adjusted loss of $5.00 to $5.50 per share, according to its Oct. 20 filing. It expects fuel to cost $1.8 billion more than its original 2026 plan. It also expects fourth-quarter capacity growth of 1% to 1.5%, concentrated on international routes.

On Oct. 30, Alaska confirmed plans to cut about 200 non-contract jobs, Reuters reported. Frontline non-management roles are excluded. In a memo to employees, CEO Ben Minicucci warned of a potential $700 million adjusted annual pretax loss if conditions persist. Alaska’s affected employees are scheduled to work their last day Nov. 13 and will be paid through Dec. 31.

Little protection from hedging

Most major U.S. carriers have little or no financial protection against fuel price swings. American, United, Delta and JetBlue had no material fuel hedges, Reuters reported Oct. 28. Southwest ended its longstanding hedging program last year, and Alaska and Hawaiian closed their remaining positions.

U.S. Gulf Coast jet fuel traded at $4.444 per gallon on the spot market on Oct. 27, down from $4.632 a week earlier, according to the U.S. Energy Information Administration. Spot prices differ from what airlines actually pay once delivery, taxes and other costs are added.

United’s investor update assumed about $4.80 per gallon for the fourth quarter. By its estimate, each 1-cent change in the price per gallon moves quarterly earnings by about 2.5 cents per share.

Spirit’s collapse

Fuel has already helped bring down one carrier this year. Spirit Aviation Holdings, parent of Spirit Airlines, began an immediate wind-down on May 2 and canceled all flights. The company cited rising oil prices, other pressures and its inability to raise more money. Spirit was already restructuring at the time.