Key Highlights

● American traded around $12.57 on October 22 despite forecasting losses.

● It posted a third-quarter loss of $0.41 a share.

● It guided to a fourth-quarter adjusted loss of $0.50 to $1.10 a share.

● American plans to slow its capacity growth.

American Airlines (NASDAQ:AAL) climbed on Thursday, October 22, 2026, gaining on the Dow Transportation Average even after it forecast adjusted losses for the fourth quarter and the full year. The shares traded around $12.57.

American reported its third-quarter results before the opening bell, and the stock's ability to rise despite red ink reflected a sector-wide lift from rival Southwest Airlines (NYSE:LUV).

Losses on the horizon

American posted a third-quarter loss of $0.41 a share. Looking ahead, the airline guided to an adjusted loss of $0.50 to $1.10 a share for the fourth quarter and an adjusted loss of $1.00 to $1.60 a share for full-year 2026.

The company also said it plans to slow its capacity growth, adding seats and flights at a more measured pace. Airlines often rein in capacity when costs rise, since flying fewer seats than planned can help support fares and limit fuel consumption.

Fuel costs bite

The main pressure on airline profits is fuel. Brent crude settled at $113.17 a barrel on Thursday, its highest since May 4, after Houthi attacks in Saudi Arabia and a media report that the US and Israel plan renewed strikes on Iran after the November 3 midterm elections. Jet fuel prices track crude closely, and fuel is one of an airline's largest costs.

Southwest Airlines, which reported late on Wednesday, cut its 2026 earnings guidance to $2.60 to $2.85 a share from $3.25 to $4.25, citing $821 million in extra fuel costs. United Airlines (NASDAQ:UAL) cut the high end of its guidance, citing energy costs, according to market data.

Why the stock rose

Despite the gloomy guidance, American's shares climbed with the rest of the sector. Southwest reported record revenue of $8.42 billion and earnings of $0.66 a share, ahead of forecasts, along with record revenue per available seat mile. Airline stocks rose after Southwest's strong results, as investors took the numbers as a sign that travel demand remains robust.

Delta Air Lines (NYSE:DAL) also rose in sympathy with Southwest, while United traded roughly flat. For American, the read-through on demand appeared to matter more on the day than its own loss forecast.

A broad rotation

The airline gains were part of a wider rotation away from AI and chip stocks after Meta Platforms (NASDAQ:META) outlined heavy capital spending and Lam Research (NASDAQ:LRCX) gave a supply-constrained outlook. The Nasdaq Composite fell 694 points to 26,008.86, its steepest drop since June 5, and the S&P 500 lost 93.74 points to 7,663.43, its worst day since July. The Dow Jones Industrial Average ended essentially flat, up 11.89 points at 52,867.98.

Transport stocks were broadly higher. Union Pacific (NYSE:UNP) rallied after record results, CSX (NASDAQ:CSX) surged on an earnings beat and Ryder System (NYSE:R) soared after raising its outlook. About two of every three S&P 500 stocks rose, according to market reports. Treasuries rallied, pulling the 10-year yield back below a closely watched threshold for the first time since September 22, and weekly jobless claims fell to 194,000, the fewest in about three months.

American Airlines Watches Fuel and Fares

Fuel prices will be the biggest swing factor for American's outlook, with Middle East tensions keeping crude near its highest levels since May. Investors will also watch how the airline executes on its plan to slow capacity growth and whether fares hold up. The Federal Reserve's policy decision on October 28 and third-quarter GDP data on October 29 will offer further clues about the strength of the consumer and travel demand into the holiday season.