AAL demand is strong — Q3 revenue of 16.34 billion beat and Q4 revenue is expected up 19.5%-22.5% — but fuel costs overwhelm it: Q3 fuel expense jumped 68% to 4.6 billion; Q4 fuel near $4.70 a gallon, double a year ago, lifts the bill 2.8 billion. Q4 guidance is a loss of 50 cents to $1.10, wider than expected.

Today, we're talking about American Airlines. fuel prices continue to be a headwind for airlines. No company appears to be more affected than American Airlines when looking at its figures . The company has already recorded a loss.

The loss was better than expected, but it anticipates continued high fuel prices and therefore a higher fuel bill. The company's shares have already fallen by about 20% since the beginning of the year.

This move downward intensifies the downward trend we have seen throughout the year.

The loss it reported was 28 cents per share on an adjusted basis. Expectations on Wall Street had pointed to a loss of 35 cents per share.

Revenues reached 16.34 billion, which is slightly above expectations as demand for travel remains strong. High prices continue to support revenues, but fuel prices are rising too rapidly to translate that into profits or stem the bleeding of the balance sheet.

The major point of pressure, as I mentioned, is the jump in fuel expenses in the third quarter by 68% to reach 4.6 billion. They pay an average of $3.85 per gallon. For the fourth quarter , they expect to pay around $4.70 per gallon.

This represents roughly double what the company was paying a year ago. At this level, they expect the fuel bill to increase by 2.8 billion compared to the previous year. So, the higher prices helped, but they are not enough to restore profitability here.

Regarding the fourth quarter outlook , they expect revenue to rise by between 19.5% and 22.5%. But they still expect a loss. They are expecting an adjusted loss of between 50 cents and $1.10.

This is more than analysts expected. They were expecting a loss of about 52 cents per share.

This is our first down day in four days, and with oil rising to touch $100 a barrel, the story becomes clear. American Airlines tells us clearly that rising fuel costs are putting real pressure on the company.