American Airlines raises revenue estimates after strong Q4
American Airlines shares rose Thursday after the carrier raised its revenue and profit estimates for the fourth quarter due to strong demand and high fares.
American’s stock gained nearly 10% to $16.83, its highest closing price since June and far higher than shares of other airlines, which also rallied. American Airlines was the biggest winner of the day in the S&P 500.
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American said in a securities filing that it expects revenue to rise as much as 17% over the same period in 2019, up from a previous forecast of an 11% to 13% rise in compared to the previous three-year period, before the Covid pandemic.
American said revenue per thousand seats may have climbed 24% over the 2019 quarter, higher than previous expectations of 18% to 20%.
It expects to report adjusted earnings per share between $1.12 and $1.17, up from its previous estimate of between 50 cents and 70 cents.
Thursday’s update is the first sign of how a major airline has dealt with a rocky end to the year, when severe weather caused major groundings across the United States during the busy holiday travel season. America is expected to report full results on January 26. Delta Air Lines Quarterly results are expected to be announced on Friday morning.
America’s new CEO, Devon May, who started in that role on January 1, told CNBC that tickets are currently coming in as expected.
The Fort Worth, Texas-based airline is forecasting a 10% increase in unit costs, excluding fuel.
High costs, staffing issues and delays in aircraft deliveries have eaten into airline profits over the past year.
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Other carriers are also looking for ways to reduce costs. For instance, JetBlue Airways earlier this week they told pilots to try to conserve fuel by taxiing with one engine and quickly connecting ground power to reduce reliance on auxiliary power systems. He even suggested that crews pack lights.
Cutting aircraft weight by 30 pounds per flight could save $1 million a year, JetBlue told pilots Tuesday.
“It may seem silly, but what we pack is important,” JetBlue said in a pilot memo, seen by CNBC. “While we all have essential items that we need while traveling, it’s important to pack what you need and leave what you don’t at home. “