MW Here's what American Airlines' CEO just said about a possible merger with United
By Tomi Kilgore and Claudia Assis
American Airlines' stock jumps after quarterly record revenue, and CEO pans the idea of merging with United
American Airlines reported quarterly revenue that rose to a record, and the stock gained.
It was inevitable.
Among the first questions asked on Thursday of American Airlines $(AAL)$ CEO Robert Isom on a postearnings results call with Wall Street analysts was about a potential merger with United Airlines. $(UAL)$
Isom did not mince words: American views the idea of the two largest airlines in the world getting together as anticompetitive.
"Look, we're going to be roommates and we're not getting married," he said. A merger would be "bad for customers, bad for the industry, and then ultimately that'd be bad for American Airlines."
Isom's comments came after last week's reports that United CEO Scott Kirby had floated the idea of United buying American in a meeting with President Donald Trump.
That was largely deemed as improbable, based on the same anticompetitiveness concerns Isom mentioned.
Don't miss: 5 things to know about a potential airline merger of United and American
Isom did not completely dismiss the idea of consolidation. There are "opportunities" for that, he said. "American has a long history of being aggressive. We've got a lot of experience. And whether it is the potential for M&A or the work that we've done to pioneer partnerships, we're going to be on the forefront of that," the executive said.
American bought the assets of TWA in 2001 and bought US Airways in 2013.
American's stock jumped 4% on Thursday, with investors eyeing a record first-quarter revenue and the company's expectations that travel demand will keep growing in the face of rising costs.
The airline's results come at a precarious time for the airline sector, as a surge in fuel costs due to the Iran conflict is forcing carriers to cut capacity, which could eventually lead to less travel demand. The concerns are mostly centered in Europe, however, where air carriers have made deeper capacity cuts.
American's first-quarter revenue rose 11% from a year ago to a record $13.91 billion, above the average analyst estimate compiled by FactSet of $13.79 billion.
For the current quarter, the company said revenue was on track to rise 13.5% to 16.5% to another record, while the current FactSet revenue consensus of $16.37 billion implies 13.8% growth.
That upbeat outlook includes an assumption that fuel prices will rise to $4 a gallon in the second quarter, which is 45.5% above the average price paid during the first quarter of $2.75 per gallon. That was 10.7% higher than prices paid a year ago.
That $4-a-gallon expectation was viewed by some analysts as optimistic. Tom Fitzgerald at TD Cowen said he estimates jet fuel to reach $4.15 a gallon. The consensus calls for $4.10 a gallon.
American expects continued strong travel demand and moves to "recapture elevated fuel prices" - which would suggest fare increases - to partially offset higher fuel costs.
Meanwhile, for the first quarter, the company reported a third quarterly loss in the past five quarters. But the per-share loss narrowed to 40 cents from 59 cents, beating the FactSet loss consensus of 47 cents a share.
Traffic rose 3.9% to 58.55 billion revenue passenger miles, while capacity increased by a more modest 3% to 72.01 billion available seat miles. That pushed load factor up by 0.7 percentage points, to 81.3.
The stock has dropped 25% in 2026 through Wednesday, while the U.S. Global Jets ETF JETS has lost 7.8% and the S&P 500 index SPX has gained 4.3%.
-Tomi Kilgore -Claudia Assis
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(END) Dow Jones Newswires
April 23, 2026 12:15 ET (16:15 GMT)
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