Mix of revenue recovery and higher costs for American Airlines
FORT WORTH (CBSDFW.COM/AP) — On Tuesday Fort Worth-based American Airlines said that first-quarter revenue, while not back to pre-pandemic levels, will probably be better than Wall Street expected on strong travel demand. However, spending on labor and jet fuel are rising at the same time.
The mixed outlook from American could provide a hint of what other airlines will say when they begin reporting financial results for the quarter, starting with Delta Air Lines on Wednesday.
American said revenue will likely be down 16% from two years ago, slightly better than the 17% difference it had forecast earlier. That would work out to $8.89 billion, which is slightly above the $8.87 billion consensus among analysts were surveyed by FactSet.
The airline said spending in the quarter also would be slightly higher than it projected less than a month ago, and up to 13% above the same quarter of 2019. American has been adding workers after struggling with its operation at times last summer and fall. Fuel prices are also 7 cents per gallon higher than expected – not an insignificant amount, since the company estimated that it burned 895 million gallons in the first quarter.
Wall Street expects American to post a loss of $2.40 per share in the quarter when it reports results on April 21.
Shares of American Airlines Group Inc. rose about 1% in morning trading.
