Dive Brief:
- American Airlines will continue to invest in CX and premium options, two of the four pillars in its economic strategy, to prepare for a strong 2027 despite the mixed results of its latest quarter, executives said on a Q3 2026 earnings call Thursday.
- Revenue rose 19.3% year over year in Q3, ahead of the high end of the guidance range, according to an earnings report. However, the company had an adjusted net loss of $182 million due to a $1.9 billion increase in fuel expenses — up 67.5% year over year.
- “Our confidence comes from the strength we see in the underlying business, bolstered by encouraging results from our commercial initiatives and delivering on our commitments, even as higher fuel prices obscure some of that progress in our reported results,” CEO Robert Isom said on the call.
Dive Insight:
American Airlines saw success in its customer experience and premium investments, even if they weren’t enough to offset the impact of rising fuel prices.
The AAdvantage loyalty program was a bright spot in the quarter, with enrollments up 27% year over year, according to Chief Commercial Officer Nat Pieper. Customers in New York, Los Angeles and Chicago, where enrollment rose between 35% and 65% year over year, continued to lead that growth.
Earlier this month, American added the ability for AAdvantage members to use a combination of cash and miles when booking flights. Early results from this change have been promising, according to Pieper.
American is investing in making the digital experience better for all customers, Pieper said. This includes updates to how the airline manages disruptions and delivers timely information, and has already led to improvements in mishandled baggage rates and missed connections.
While American sees value in its CX investments, they won’t necessarily pay for themselves, CFO Devin May said. Instead, they support all of American’s commercial initiatives to produce better results.
“We view it from a broader lens than just kind of one investment or one initiative at a time,” May said. “But we think we're taking the right steps and making the right investments to drive closure in this revenue gap that we have today.”
This includes increasing the airline’s appeal to premium customers.
Premium sales generate about half of American’s ticket revenue despite only accounting for about 30% of seats, according to Isom. The company is adding more premium seats with every new aircraft and retrofitting existing planes.
Premium revenue rose 22.9% year over year in the third quarter of 2026, outpacing main cabin revenue growth of 19.5% year over year, according to the earnings report.
Executives have high hopes for a return to revenue growth in the near future.
“We've rebuilt the network, invested in the customer experience, expanded our premium product offerings, and strengthened our AAdvantage Loyalty program, reinforcing the fact that we're a premium global airline,” Isom said. “With those investments now in place, we're seeing the benefits in our revenue performance.”
