American Airlines battles weather setbacks despite record 2026 bookings
American Airlines Group has faced a mixed start to 2026, with strong early booking trends but setbacks from severe weather. The company reported record demand in January, yet winter storm Fern disrupted operations and cut into first-quarter revenue. Despite challenges, the airline remains focused on growth and profitability.
The company's fourth quarter and full-year 2025 earnings missed earlier guidance. A government shutdown contributed to lower revenue, adding pressure before the new year. Then, in early 2026, winter storm Fern forced the cancellation of over 9,000 flights, creating a significant revenue headwind.
Bookings in January, however, showed a strong rebound. The airline recorded double-digit system revenue gains compared to the same period last year. Management also pointed to outsized growth in premium cabin revenue as a key structural advantage.
To boost long-term performance, American Airlines plans to expand capacity at major hubs. It will also continue premiumising its product offerings, though no specific details were shared on occupancy rates or new measures for premium cabins. Additionally, the company extended its ten-year cobranded card partnership with Citi to improve profitability.
Financial discipline remains a priority. The airline will keep capital allocation flexible until it meets leverage and credit rating targets. For 2026, the goal is to generate over $2 billion in free cash flow.
The airline enters 2026 with both momentum and hurdles. Record bookings and premium revenue growth signal demand, but storm-related losses and past earnings shortfalls pose challenges. Expansion plans and financial targets will shape the company's path forward this year.
