American Airlines Group Inc. said its second-quarter profit may exceed Wall Street projections as international demand builds headed into the peak summer season.
(Bloomberg) — American Airlines Group Inc. said its second-quarter profit may exceed Wall Street projections as international demand builds headed into the peak summer season.
Adjusted profit will be $1.20 to $1.40 a share in the quarter, American said in a statement Thursday, compared with an expected $1.13 a share on average from analyst estimates compiled by Bloomberg. The company reiterated its outlook for a full-year adjusted profit of $2.50 to $3.50 a share.
The company, like its largest rivals, is seeing a rebound in flights outside the US after travelers pulled back on those trips last year when many Covid-related restrictions were still in place. The airline is devoting 80% of its capacity growth this quarter to long-haul international routes.
“We’re seeing a lot more bookings coming in a lot sooner,” for long-haul international flights, Chief Commercial Officer Vasu Raja said on a call with analysts.
United Airlines Holdings Inc. said last week that global travel is expanding at twice the rate of domestic, while Delta Air Lines Inc. is increasing international seats by more than 20% this quarter over a year ago.
American’s sales growth this year has trailed its biggest competitors, in part because of a pilot shortage at its regional airline partners and delays in deliveries, Chief Executive Officer Robert Isom said. The airline still has about 150 regional jets it can’t fly.
American shares rose 2.1% at 10:37 a.m. in New York. The stock climbed less than 1% this year through Wednesday.
Costs for each seat flown a mile, a measure of efficiency, will increase as much as 5.5% this quarter, while revenue on the same basis will decline 2% to 4%, American said. Flying capacity will also rise as much as 5.5%.
In the first quarter, the airline reported adjusted profit of 5 cents a share, topping analysts’ estimates for about 4 cents. Revenue was $12.2 billion, meeting expectations.
American also reduced its industry-leading debt by more than $850 million in the first quarter, bringing it to 60% of its goal to cut total debt by $15 billion by the end of 2025.
(Updates with company comment in fourth paragraph.)
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