American Airlines posted a smaller-than-expected loss in the third quarter and now expects to return to profitability for the year, driven by resilient corporate and premium leisure demand. The carrier also raised its fourth-quarter guidance, echoing strong outlooks from Delta and United.
BNN Bloomberg spoke with Stephen Trent, independent aviation specialist, who said American’s efforts to rebuild its corporate base are paying off and that 2026 could mark a pivotal year for the airline as its co-branded credit card partnership ramps up and labour costs stabilize.
Key Takeaways
- American Airlines’ third-quarter loss was smaller than expected, with improved guidance for the fourth quarter.
- The carrier expects a full-year profit, supported by steady demand in corporate and premium leisure travel.
- Analyst Stephen Trent said fourth-quarter demand indicators look strong, with momentum building into 2026.
- A new Citigroup co-branded card and stable labour contracts could strengthen results in 2026.
- Trent noted American’s equity value remains below pre-pandemic levels, presenting a potential opportunity.
Read the full transcript below:
ROGER: American Airlines reported a smaller-than-expected loss for its third quarter, and the carrier joined rivals in predicting a strong end to the year as corporate and premium leisure travel remain the industry’s growth drivers. Let’s take a closer look at the company’s latest results with Stephen Trent, an independent aviation specialist. Stephen, thanks very much for joining us.
STEPHEN: Thank you for having me on.
ROGER: A little bit of a loss, but people seem to be happy with that.
STEPHEN: Yeah, absolutely. It was better than the Street anticipated. And I think what’s more important is the fourth quarter looks really solid. The guidance midpoint is substantially better than what the carrier was forecasting just three months ago. So I think several of those verticals American’s been trying to improve are indeed showing tangible progress.
ROGER: And what are some of the improvements they’ve made?
STEPHEN: Well, premium cabin demand continues to hold up nicely. The main cabin is also starting to look stronger after some choppiness earlier on. When we think about the labour cost outlook for this carrier versus its peers, American already has most of its contracts in place. Some of their competitors still have adjustments to come. And looking ahead to 2026, the co-branded card agreement with Citigroup should start to ramp up, which is quite intriguing.
ROGER: And on the downside, what might be a hindrance? What could derail all this optimism in the fourth quarter?
STEPHEN: There are plenty of external factors out there. But if we focus on company-specific issues, the pace at which they continue to add corporate and premium leisure demand will be important to watch. At this point, though, we’re already getting good indications — for example, what they’ve achieved out of their hub in Chicago. So the writing on the wall so far looks good for the fourth quarter, and I’d argue it looks even better for 2026.
ROGER: And what about the industry as a whole? We’ve had some good reports on airline earnings lately.
STEPHEN: Yes, and compared with the pre-pandemic period, we’ve seen structural adjustments that benefit the network airlines. That includes shifts in consumer behaviour and how people buy tickets. There’s more premium leisure now, probably linked to people not being in the office five days a week anymore. That’s a big advantage for the network carriers — Delta, United, American and Alaska — because they already have the infrastructure in place. Add to that the revenue from co-branded cards, and if you’re a discount airline, it’s going to be hard to keep up. The post-COVID earnings and wallet-share gains we’ve seen for the network carriers look structural and sustainable.
ROGER: Is there one airline that seems to be leading the pack?
STEPHEN: Delta is well known for being a very well-run airline with a strong brand — no one in aviation would dispute that. But among the network airlines, I’d argue American might be the surprise. There’s been a lot of talk about its debt and margins lagging Delta and United, but it’s laying the groundwork for potentially substantial improvement by 2026. Labour costs are already set, leverage is trending down, and American has the youngest mainline fleet among the big three, so there’s less capital spending required compared with peers. I think that’s been somewhat overlooked by the Street.
ROGER: They did lift their capital expenditures by $500 million based on earlier-than-planned aircraft deliveries. Are you still optimistic?
STEPHEN: Yes, and I’d note that the capex increase was relatively modest compared with what some competitors will face. The Street tends to focus too much on American’s leverage and not enough on the positives. Its equity market cap today is below COVID-era levels — a sharp contrast with Delta and United — and that, in my mind, looks like an opportunity.
ROGER: We’ll leave it there. Stephen, thanks very much for joining us.
STEPHEN: Thank you for having me.
ROGER: Stephen Trent is an independent aviation specialist.
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This BNN Bloomberg summary and transcript of the Oct. 23, 2025 interview with Stephen Trent are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
