American, United and Southwest Trim Flights as Jet Fuel Costs Surge

## Why Three Carriers Reached the Same Conclusion in the Same Week

Speaking at Morgan Stanley's 14th annual Laguna Conference on 16 September 2026, finance chiefs at American Airlines, United Airlines and Southwest Airlines each described the same response to the same problem: jet fuel has climbed far enough, fast enough, that flights which were marginally profitable in 2025 now lose money.

The arithmetic is unforgiving. Jet fuel is trading at roughly 4.71 dollars a gallon, close to a 20-year high and nearly double its level a year earlier. United and American each spent almost 49 percent more on fuel in the first half of 2026 than in the first half of 2025. Southwest's fuel bill rose about 39 percent over the same period.

Fuel is the one major airline cost that cannot be hedged away indefinitely, renegotiated, or deferred to a later quarter. When it moves this far, the fastest lever available is the schedule.

What Each Carrier Is Actually Doing

**American Airlines** has told investors the fuel increase will add roughly 1 billion dollars to fourth-quarter expenses, with the price running about a dollar a gallon above the assumptions built into its July guidance. Chief Financial Officer Devon May has framed the sensitivity plainly: each additional cent on the price of a gallon changes quarterly costs by about 10 million dollars. The airline is reviewing further schedule adjustments later this year.

**United Airlines** has already removed some December flights and has said further adjustments are possible in the first quarter of 2027 and beyond if fuel stays elevated. Chief Financial Officer Michael Leskinen put the strategy directly: "We are not flying to maximize market share. We're flying to maximize profitability and free cash generation." Roughly 35 percent of United's fourth-quarter tickets were already booked at the time of those remarks, and Leskinen indicated the airline expects to recover the full additional fuel expense over time through pricing.

**Southwest Airlines** has cut its planned 2026 capacity growth roughly in half. The carrier had targeted 2 to 3 percent growth and now expects something closer to 1 to 1.5 percent. Chief Financial Officer Tom Doxey described further trimming as the natural response if fuel stays where it is. Southwest also reported autumn revenue running ahead of expectations, which reinforces the point: this is a cost decision, not a demand decision.

The Part Travellers Should Pay Attention To

Demand has held up well enough that all three carriers believe they can pass the fuel increase through in fares rather than eat it. That combination — flat-to-shrinking seat supply against steady demand — is the textbook setup for firmer pricing, particularly on routes with only one or two daily frequencies.

The routes most exposed are the ones that were already thin: small domestic markets, off-peak short-haul banks, and seasonal leisure flying that only worked at last year's fuel price. Long-haul international and core hub-to-hub trunk routes are far less likely to be touched.

Against this backdrop, IATA has forecast global airline profits falling from roughly 45 billion dollars in 2025 to about 23 billion dollars in 2026. Capacity discipline is the industry's standard answer to that kind of compression, and it is now visibly underway in the US domestic market.

If You Have Travel Booked

Check your itinerary periodically between now and departure, particularly for December travel and anything booked into the first quarter of 2027 on a smaller market. Airlines are required to notify you of significant schedule changes, but notifications arrive by email and are easy to miss.

If a schedule change materially alters your trip — a substantially different departure time, a lost connection, or a cancelled flight — US carriers must rebook you on their own flights at no additional cost, and the Department of Transportation's refund rules continue to apply where you choose not to accept the alternative. Those obligations are unaffected by capacity planning decisions.