American Airlines expects profit this year to exceed estimates as the industry recovery stretches into 2023, buoyed by steady demand from leisure passengers and a rise in mixed work-personal trips.
Full-year adjusted earnings will be $2.50 to $3.50 a share, the Fort Worth, Texas-based carrier said in a statement on Thursday that also detailed fourth-quarter results. Analysts had expected $1.89 on average, according to estimates compiled by Bloomberg.
American joined several of its largest rivals anticipating that strong travel trends will continue this year despite inflation and threats of a recession. Industry profits have got a boost from high ticket prices, driven by a combination of heightened demand and limited growth amid delayed aircraft deliveries and a pilot shortage. American has said it will remain as much as 5 per cent below pre-pandemic capacity this year.
The carrier has said demand from small and mid-sized companies and trips mixing leisure with work have recovered faster than larger corporate travel accounts, helping airlines fill the void left by lucrative business flyers.
The shares climbed 1.4 per cent before regular trading in New York. American surged 28 per cent this year through Wednesday’s close.
Adjusted fourth-quarter profit was $1.17, at the high end of the preliminary range American reported on January 12th. Revenue climbed to $13.2 billion, in line with estimates. – Bloomberg