American Airlines expects to top profit estimates as travel demand continues

Carrier says it will remain as much as 5% below pre-pandemic capacity this year

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.

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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