American Airlines Keeps Praising Trump While Taking A $7 Billion Fuel Hit—What Do They Want?

American Airlines was already forecasting nearly $6 billion more in annual fuel costs when CEO Robert Isom went to the White House to praise President Trump. Two weeks later, his CFO warned that the latest fuel price spike had added another roughly $1 billion to the fourth-quarter outlook. At the White House, Isom touted records at American and across the industry, saying there was “no doubt it’s a result of the economy and also the job market.” He told Trump that, in selecting Transportation Secretary Sean Duffy, “You’ve absolutely chosen the best person possible.” Trump responded, “We like American.” And Isom clearly wants to make sure he continues to hold that view. He didn’t always – neutering Isom’s predecessor in the Oval Office before the pandemic over the airline’s flailing stock price. Trump’s war with Iran has disrupted oil supplies and driven up jet fuel costs. American had already announced temporary summer route suspensions because of expensive fuel in June. At the September 16 Morgan Stanley conference, CFO Devon May put the fourth quarter exposure at about $1 billion. Isom warned that persistently high fuel prices would require adjustments to planned flying. United was removing planned December flights, while Southwest had roughly halved its planned capacity growth for 2026. Airlines are giving up flying they expected to do because the fuel bill causes them to lose money on the routes. Demand remains strong and some of the industry’s higher fares are recovering higher costs. But customers paying more, and airlines flying less to protect their margins, isn’t exactly the narrative the administration wants going into the midterms. But why is Isom continuing to flatter Trump? Trump Accounts. On August 31, American announced it would contribute $1,000 to accounts for eligible children of employees, matching the government’s contribution. It thanked Trump. I estimated the cost at around $12 million to fund the benefit for a narrow group of employees, attached to a program bearing the president’s name. Trump’s airport name. American putting the president’s name on West Palm Beach gate screens and giving agents talking points to explain it were unusual. Praise even while rejecting a merger. American’s April statement opposing a United combination opened by thanking Trump, Duffy and other administration officials for their leadership, support and expertise. American still hasn’t gone as far as Scott Kirby’s United from United’s $1 million inauguration contribution, Kirby’s defense of tariffs, and his appearance on Katie Miller’s podcast to standing with the vice president and transportation secretary to call out Democrats during last year’s government shutdown. Then Kirby pitched buying American Airlines to Trump. A heavily regulated airline has plenty of reason to stay on good terms with the people running its regulator. Executives have courted administrations of both parties. But American also has some unusually large decisions ahead of it. Two in particular stand out. Political Cover For An Airbus Widebody Order American is considering an order for up to 65 widebody aircraft. I’ve argued that the Airbus A330-900 is a particularly plausible choice. That would mean adding European-branded widebodies with Rolls-Royce engines to an airline whose current widebody fleet is entirely Boeing. I wonder whether some of American’s enthusiasm for Trump is intended to make that decision easier politically. The administration has made Boeing sales a centerpiece of its trade agenda. And in July, Trump accepted a finding that imported commercial aircraft, engines and parts threaten U.S. national security. He ordered negotiations rather than immediate new tariffs, while preserving the possibility of tariffs and other remedies. An airline choosing Airbus will want Trump thinking well of it before the announcement. Is American Negotiating With Alaska Again? In April, the two airlines were revealed to have explored a merger and there were discussions of bringing Alaska into American’s international joint ventures, including its partnership with Japan Airlines across the Pacific. Either one would require antitrust signoff. American is weak in the Pacific Northwest and Northern California where Alaska has customers and network relevance. Alaska is building a small long haul operations. Revenue sharing and schedule coordination could benefit both. DOT That is also a very specific reason to cultivate Sean Duffy. His department grants antitrust immunity for joint ventures. DOJ approval is needed for a merger. Both agencies follow direction from the President in ways previous administrations have kept executive whim separate. There would still be overlapping routes and lost competition to address where state attorneys general could challenge a merger. An acquisition would also mean paying for Alaska and combining the companies. An international joint venture could deliver significant commercial benefit without the same cost. American was careful, when rejecting United, to say that “changes in the broader airline marketplace may be necessary” suggesting other deals could be in the offing. Topics on this page