United Airlines said July 15 that fuel prices had added $575 million to its projected third-quarter fuel expense since the beginning of July and nearly $6 billion to its anticipated full-year 2026 fuel bill compared with expectations at the start of the year. On July 23, American Airlines lowered its full-year adjusted earnings outlook to a range from a loss of 65 cents per share to a profit of 65 cents.

What changed at United and American

United said it was assuming an all-in third-quarter fuel price of about $3.69 per gallon, based on the Gulf Coast jet forward curve as of July 14. The company said it expects to recover 80% to 90% of the third-quarter fuel increase through stronger revenue and 100% by the fourth quarter. Those are company projections, not guarantees.

United also said its fourth-quarter capacity was expected to decline from current published schedules as part of its normal course of planning and that it was prepared to moderate near-term capacity further if fuel remained elevated. Its second-quarter results showed fuel expense of $5.11 billion, up $2.3 billion, or about 84%, from a year earlier. United said it recovered approximately half of that increase through revenue. It nevertheless raised its full-year adjusted earnings-per-share guidance to $9 to $11, assuming its fuel and revenue expectations hold.

American reported record second-quarter revenue of $16.7 billion and said strong demand and commercial execution offset nearly half of a more than $2.2 billion year-over-year increase in fuel expense. The company said second-quarter fuel expense rose more than 83% and that it expects third-quarter fuel expense to be up $1.7 billion year over year, based on a forward fuel curve of about $3.75 per gallon as of July 21. Given the higher fuel cost, American lowered its full-year adjusted earnings outlook to between a loss of 65 cents and a profit of 65 cents per diluted share.

Why fuel hits before fares can catch up

Airlines buy and consume fuel continuously, so a sharp move in energy markets can affect operating costs almost immediately. Ticket prices work differently. A fare increase applies only to tickets sold after the change, and airlines must balance higher prices against demand, competition and the risk of leaving seats empty.

That timing mismatch can weaken earnings before a carrier has enough new bookings at higher prices to offset the added expense. Reuters reported that major airlines were using fuel assumptions based on different dates, making earnings outlooks issued only days apart difficult to compare. That helps explain why carriers can announce sharply different guidance within a short period.

What the national data show

The Transportation Department’s Bureau of Transportation Statistics reported that scheduled U.S. airlines spent $6.66 billion on fuel in May 2026, up 83.9% from May 2025. They used 1.627 billion gallons, down 0.6% from a year earlier. The increase therefore reflected substantially higher fuel costs rather than a comparable increase in fuel consumption.

BTS reported an average domestic fare of $428 in the first quarter, up 4.7% from the fourth quarter of 2025. That figure predates the sharpest July fuel increase and should not be treated as a measure of how much airlines have since passed through to travelers. BTS said the fare series uses its newer 40% ticket-sampling methodology, which began July 1, 2025.

BTS also cautions that its fuel statistics may be revised, are reported in current dollars and can be affected by hedging and carrier reporting coverage. The figures reflect fuel paid for by carriers, not simply the spot price on a particular day.

How airlines can respond

Carriers can raise fares, increase revenue from premium cabins and loyalty programs, adjust schedules, trim less-profitable flying, defer some spending or use cash and borrowing capacity to absorb part of the shock. Each choice has limits. Higher fares can reduce demand, while capacity cuts can protect margins but make some routes less convenient and reduce the number of available seats.

United’s disclosure shows that capacity decisions are part of its response planning. American, meanwhile, reported that its second-quarter capacity grew 5.4% year over year and projected third-quarter available-seat-mile growth of 3% to 5%. The difference underscores that a fuel shock does not automatically produce the same response at every airline.

Neither company’s announcement establishes that broad job cuts are coming, and the selected evidence does not document a national airline layoff program. Fuel pressure could affect hiring, fleet timing, investment or schedules if it persists, but those effects remain risks to watch rather than confirmed outcomes.

What travelers and workers should watch

Travelers may see pressure on fares or schedules, but the timing and size of any change will vary by airline, route and booking date. A fuel spike does not automatically produce an equivalent fare increase, particularly when carriers are competing for demand.

The next signals will be updated fuel assumptions, third-quarter earnings, capacity changes, fare data and guidance from other major carriers. For workers, the more immediate indicators are changes in hiring plans, fleet deliveries, schedules and investment—not assumptions about layoffs that have not been announced.

The airline outlook now depends on two moving targets: where fuel prices go next and how quickly carriers can recover the added cost through revenue without weakening travel demand.

Sources

• United Airlines investor update filed with the SEC
• American Airlines second-quarter results and outlook
• Bureau of Transportation Statistics airline fuel data
• Reuters analysis: Fuel swings turn U.S. airline earnings forecasts into moving targets