After fully recapturing in the prior quarter the managed corporate share lost with its prior sales and distribution strategy, "we gained a little bit since then, and we're going to continue to be very active at improving from there," American president and CEO Robert Isom said.
Executives reported "continued momentum" in managed corporate revenue, which increased 13 percent year over year for the first quarter, American CFO Devon May said.
Chief commercial officer Nathaniel Pieper added that Q1 revenue for American's AAdvantage Business product, its corporate loyalty program geared toward small and midsized enterprises, was up 28 percent year over year, and "our [travel management company] performance was up 11 percent, thanks to our partnerships with Amex GBT, with BCD and their support of American."
"We continue to deepen the relationships we have with our corporate and agency partners and are capturing greater share among high-value customers," Isom said. "Our customer base skews higher-end, and our customers have shown that they're willing to spend more for an improved travel experience."
American is seeing the most uptake in the banking, healthcare and pharma and industrial verticals, both domestically and internationally, Pieper said. "Across all verticals, I think there's still opportunity there."
Fuel Recapture
American noted that it had a $400 million increase in fuel expense versus "the forward curve in January," Isom said, adding that despite that headwind, and assuming the current forward fuel curve, "we expect to be profitable in 2026."
Fuel costs for the second quarter were $2.75 per gallon, up from $2.48 in Q1 2025.
The carrier expects a second-quarter fuel price of approximately $4 per gallon, with the full-year outlook on fuel projected to be up $4 billion year over year, according to May.
Most carriers are attempting to recapture their increased fuel costs through surcharges and reduced capacity.
"If fuel continues [to be elevated] through the third quarter into the fourth quarter, we're going to see some more broad industry capacity reductions," Pieper said, adding that American has incorporated about 40 percent to 50 percent of fuel recapture into the second-quarter plan.
"We would expect that to grow through the balance of the year, 75 percent to 85 percent in Q3, and then ultimately in Q4, if fuel is still at the level with capacity reductions, I think our recapture rate would be in the 90s," he said
Closer Ties with Alaska Airlines?
Reuters on Wednesday reported that American and Alaska Air Group, parent company of Alaska Airlines and Hawaiian Airlines, were in preliminary discussions to broaden their partnership, which could include Alaska being brought into American' transatlantic and transpacific joint business partnerships.
American and Alaska already have a codeshare and reciprocal loyalty benefits as part of their "West Coast International Alliance," which also brought Alaska into the Oneworld airline alliance.
When asked about it during the call, Isom said that "I feel good about where our relationship is and what happens next. The Alaska team is fiercely independent, a very, very successful airline, and we are the same. As we go forward, we'll make sure that anything that we do complies with our scope clauses."
American Q1 Metrics
American's first-quarter passenger revenue increased nearly 10 percent year over year to $12.5 billion, with total revenue up about 11 percent to $13.9 billion, a first-quarter record, according to the carrier. Capacity increased 3 percent during the quarter. The carrier's net loss was $382 million compared with a loss of $473 million a year prior.
American projected second-quarter revenue to be up 13.5 percent to 16.5 percent year over year, driven primarily by continued improvements in domestic, growth in corporate customer volume and the ability to recapture elevated fuel costs, May said. Capacity is expected to increase 4 percent to 6 percent.
Tags: Nathaniel Pieper Devon May American Airlines Robert Isom
