American Airlines struggles after $325M hit from shutdown and winter storms
American Airlines has faced a challenging start to 2026 after a turbulent end to 2025. The carrier reported a modest fourth-quarter profit, but severe weather and a costly government shutdown weighed heavily on its financial performance. Despite these setbacks, the airline remains optimistic about growth in the coming months.
The company's fourth-quarter results showed a net income of $99 million, with adjusted earnings per share of $0.16. This fell short of analyst forecasts, which had expected earnings between $0.35 and $0.38 per share. The shortfall was largely due to the US government shutdown, which cost the airline around $325 million in lost revenue.
Winter Storm Fern added to the difficulties, forcing the cancellation of over 9,000 flights. The storm alone is estimated to have reduced revenue by $150 million to $200 million. As a result, domestic passenger unit revenue dropped by 2.5% in the quarter.
Despite these challenges, American Airlines highlighted strong bookings and growth in premium travel, driven by wealthier Americans spending more on flights. However, the airline still lags behind competitors like Delta and United, both of which reported higher premium revenue—United saw a 9% increase in the fourth quarter and 11% for the full year.
Looking ahead, American Airlines expects a 7% to 10% rise in total revenue for the first quarter of 2026. The company also projects solid unit revenue growth, both domestically and across its network. While it accounted for just 4% of industry profits in 2025, forecasts suggest this could climb to around 12% in 2026.
American Airlines remains cautiously upbeat about its financial outlook, despite recent disruptions. The airline anticipates stronger performance in the first quarter, supported by rising demand in premium travel. However, its recovery will depend on avoiding further unexpected setbacks like severe weather or political instability.
