American shares jump 4.4%, United gains 2.8% as oil falls ahead of earnings call
Key Facts
U.S. airline shares rose during trading on Tuesday, 20 October 2026, as oil prices fell, ahead of United Airlines' earnings call scheduled for the following day. American Airlines shares climbed 4.4%, while United gained 2.8%, according to an Associated Press report during the session. In energy markets, Brent crude erased early gains to fall 0.8% to $108.70 a barrel, the agency reported. The gains in both stocks came after United had based its third-quarter earnings estimates on fuel assumptions issued in July. The company's update at the time linked the expected increase in fuel costs to a direct impact on adjusted earnings per share, putting oil's movement at the heart of the trading backdrop.
In guidance issued on 15 July, United had forecast adjusted diluted earnings per share of between $2.50 and $3.50 for the third quarter of 2026. For the full year, the company set an adjusted diluted earnings range of between $9.00 and $11.00 per share, according to its investor announcement. The quarterly estimate range straddles the earnings the company recorded in the same period a year earlier. Adjusted diluted earnings per share in the third quarter of 2025 were about $2.78, according to the earnings announcement for that period. The July estimates therefore encompassed the possibility of quarterly earnings below or above the year-earlier level, alongside the separate range the company announced for full-year earnings.
In the second quarter of 2026, United faced a sharp increase in fuel expenses of $2.3 billion compared with the same period a year earlier, according to its filing with the U.S. Securities and Exchange Commission. The company said in the filing that "fuel expenses increased 84% year over year." Meanwhile, operating revenue grew 16% year over year in the same quarter, according to the earnings announcement. Adjusted diluted earnings per share were $1.99, with the quarter's results reflecting both revenue growth and a higher fuel bill. The annual rate of increase in fuel expenses exceeded operating revenue growth, while July guidance for the following quarter set an earnings range with both endpoints above the second-quarter result.
In its July investor update, United assumed an average all-in fuel cost for the third quarter of about $3.69 a gallon, according to the SEC filing. It said the rise in fuel prices from the start of the month through the 15 July update had increased expected costs for that quarter by $575 million. The company equated that increase to an impact of $1.12 on adjusted diluted earnings per share, linking changes in fuel assumptions to quarterly earnings estimates. In the same update, it announced a new policy of basing its guidance on the latest fuel prices because of jet fuel price volatility. The company described the change as a "new policy of basing guidance on the latest fuel prices," tying the preparation of its forecasts to the latest price at the time of issuance.
Fuel pressures had already prompted United to revise its operating plans before announcing its July guidance, with the company announcing in April that it was changing its flight schedule for the rest of 2026 to address rising fuel prices. The adjustment included an expected capacity reduction of 5 points compared with the company's original plan, according to its filing that month. The decision appeared in the filing that reported an average fuel price of $2.78 a gallon during the first quarter of the year. That average was below the all-in cost assumption per gallon the company later used for the third quarter. The flight schedule adjustment covered the rest of the year, while the company specified the size of the capacity reduction relative to its original plan as part of its announced operating response to higher fuel costs.
The year-over-year comparison for third-quarter results is with a period in which United recorded operating revenue of $15.2 billion in 2025, according to the company's earnings announcement for that quarter. Revenue had grown 2.6% compared with the same period a year earlier. In its July 2026 announcement, the company said it expected to offset about 80% to 90% of the increase in fuel expenses during the third quarter. It added that it expected to fully offset the increase, at 100%, in the fourth quarter, setting out a timeline extending to the end of the year. United will hold its earnings call on 21 October 2026 at 10:30 a.m. U.S. Eastern time, according to the schedule published on its investor relations page.