World News | American Airlines Boosts Outlook After Busy Holiday Season
Get latest articles and stories on World at LatestLY. American Airlines raised its forecast of fourth-quarter revenue and profit on Thursday, boosted by higher fares and full planes capped off with a busy holiday travel period.
Dallas (US), Jan 12 (AP) American Airlines raised its forecast of fourth-quarter revenue and profit on Thursday, boosted by higher fares and full planes capped off with a busy holiday travel period.
American earned USD 1.12 to USD 1.17 per share in the fourth quarter, nearly double its previous forecast. Revenue was 16 to 17 per cent above the same quarter in 2019, before the pandemic.
Shares of the Fort Worth, Texas, company jumped 5% shortly after trading began, despite a losing start for the broader market.
A severe winter storm affected all US airlines before Christmas, but American and most others were able to recover quickly; Southwest was not. Southwest cancelled more than 16,000 flights in the last 10 days of December, or 37.5 per cent of its schedule, leaving more than 1 million passengers scrambling for new flights including on other airlines.
“There was certainly some benefit from re-accommodating probably a relatively small amount of Southwest passengers ... but overall the (new, higher forecast) was just broad-based strength across the quarter,” Chief Financial Officer Devon May said in an interview.
Officials said any gain from Southwest's meltdown was likely offset by American canceling more than 800 flights, or 2.6 per cent of its schedule, in late December, according to FlightAware figures.
Airlines have benefited from strong demand for travel and a limited number of flights and seats, in part because of a pilot shortage coming out of the worst of the pandemic. The result has been higher fares.
American said revenue from each seat per mile rose 24 per cent over the fourth quarter of 2021, an even sharper rise than it had previously forecast.
American is scheduled to report financial results on January 26. Delta Air Lines will lead off when it gives fourth-quarter numbers on Friday. (AP)
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