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American Airlines says airfares will stay high despite fuel drop
Fox Business • • business
Key Points:
- American Airlines warns that airfares are likely to remain high even if oil prices decline, as the carrier needs to offset previous losses from surging fuel costs.
- CFO Devon May stated that ticket prices have not fully recovered in real terms since the pandemic and that the recent price hikes reflect an industry correction after years of oversupply.
- The airline reported a 19% year-over-year increase in third-quarter revenue, the highest in its history excluding pandemic years, but fuel expenses surged 67.5%, adding $1.9 billion in costs.
- American Airlines expects fuel prices to remain elevated in the fourth quarter, forecasting an average of $4.70 per gallon, which would significantly increase fuel expenses and slow network growth in 2027.
- Higher fuel prices have driven a 22.4% year-over-year increase in airline fares as of September, reflecting broader industry trends impacting ticket pricing.
