U.S. airlines have faced a series of disruptions in recent weeks.
Photo:
Sophia Germer/Associated Press
American Airlines Group Inc.
AAL 9.71%
raised its revenue guidance for the recently ended quarter as demand for air travel remained strong through the holiday season, even as travelers contended with higher fares.
The guidance update offers one of the first looks at how a U.S. airline fared during a critical holiday travel period that saw thousands of canceled flights amid winter storms.
Fort Worth, Texas-based American Airlines had already expected fourth-quarter sales to be above pre-pandemic levels. On Thursday, the company said revenue would be 16% to 17% higher than the fourth quarter of 2019, up from its previous guidance of an increase of 11% to 13%.
Shares of American rose more than 5% Thursday morning. Shares of United Airlines Holdings Inc. were up about 4%.
Delta Air Lines Inc.
DAL 3.72%
and Southwest Airlines Co. stock rose about 1.5%.
American’s revenue per available seat mile for the quarter is expected to be up 24% versus 2019 levels, topping prior guidance. Airlines have raised prices from 2019 levels as they faced surging fuel and labor costs. Those higher prices helped boost American Airlines’ profit in the recently ended quarter.
Adjusted earnings for the fourth quarter are expected to be $1.12 a share to $1.17 a share, above the 50 cents a share to 70 cents a share that the company had previously expected. Costs, excluding fuel and special items, are seen rising 10% above 2019 levels, reaching the high end of the company’s guidance that was issued in October.
The company said it flew 6.1% less than in the same period in 2019, compared with the 5% to 7% lower capacity that it had expected.
American also said it has now achieved more than half of its goal to reduce debt by $15 billion before the end of 2025. Devon May, a company veteran, took over as American Airlines’ new chief financial officer earlier this month.
Delta Air Lines is slated to report fourth-quarter results on Friday.
U.S. airlines have contended with a series of disruptions in recent weeks. Winter storms sparked thousands of cancellations last month, and issues with Southwest’s crew-scheduling system led to thousands more. On Wednesday, the Federal Aviation Administration ordered a nearly two-hour long nationwide “ground stop” that halted U.S. departures due to an outage with a federal pilot-alert system.
Write to Will Feuer at [email protected]
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Appeared in the January 13, 2023, print edition as ‘American Airlines Boosts Its Outlook as Demand Holds Up.’
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