American Airlines Group Inc (NASDAQ:AAL) shares are dropping on Friday. The company faces a tough combination of rising jet fuel prices and a customer base that is more sensitive to fare increases. Here’s what you may want to know.

Fuel Price Shock Hits U.S. Carriers Again

U.S. airlines are facing continued turbulence. Last year, President Donald Trump's tariffs resulted in a drop in travel demand, according to Bloomberg. Now, companies are facing a second year of disruption as jet fuel prices surge in the wake of the war in the Middle East.

Jet fuel, which can account for up to 30% of an airline's operating costs, has jumped to more than $4 a gallon after spending most of 2025 near $2. Airlines now have to try to balance increasing fares enough to offset the fuel spike without driving away cost‑conscious travelers.

U.S. airlines generally don't hedge fuel prices, meaning any increase hits their bottom line immediately.

American Airlines Feels The Impact More Than Rivals

American Airlines is particularly vulnerable to fuel price swings. According to Rothschild analyst James Goodall, every 10‑cent increase in fuel costs can move American’s earnings per share by roughly 25%. With fuel prices doubling from around $2 to over $4 per gallon, the earnings hit is significant.

"Coming into 2026, the backdrop for U.S. airlines was positive," Goodall wrote in a March 5 note. "Higher fuel prices result in a material cut to our forecasts and an expectation of substantial downgrades to consensus this year." American declined to comment on the impact.

The Technical Side

American Airlines is currently positioned below all major moving averages, indicating a bearish trend. With American Airlines’ stock trading 17.2% below its 20-day SMA and 22% below its 50-day SMA, traders should be cautious as this suggests a struggle to regain upward momentum.

The RSI is at 32.25, which is considered neutral but leans towards oversold territory, indicating that while the stock isn’t in a strong oversold condition yet, there could be potential for a bounce if buying interest picks up. Currently, MACD is below its signal line, which shows bearish pressure on American Airlines’ stock.

Key support is at $11.00, while resistance is at $12.00. If the stock tests the support level and fails to hold, it could signal further declines, while a break above resistance might indicate a potential reversal in trend.

In April, a death cross occurred when the 50-day SMA crossed below the 200-day SMA, which typically signals a bearish trend. This crossover has contributed to the current downward pressure on American Airlines.

Looking at the 12-month performance, American Airlines’ stock is down 14.60%, reflecting a longer-term bearish trend. This performance underscores the challenges the company has faced over the past year, which may influence trader sentiment moving forward.

Currently, American Airlines is trading at 35.0% of its 52-week range, indicating it’s closer to the lower end of that range. This positioning suggests that the stock may be undervalued, but it also highlights the risks associated with a continued downtrend.

AAL Price Action: American Airlines shares were down 4.24% at $11.29 at the time of publication on Friday, according to Benzinga Pro.

Image: Shutterstock