American Airways shares rise on the airline’s higher second quarter forecast
American Airlines flight takes off from Miami, Florida.
Marco Bello | Reuters
American Airlines stocks rose after the airline forecast better revenues and lower losses than previously estimated for the second quarter, the latest sign of airlines recovering from travel expenses from the coronavirus pandemic.
The Fort Worth, Texas-based airline said Tuesday that it expects a “slight” pre-tax profit for the second quarter. It said it is expected to release results from a net loss of $ 35 million to a net income of $ 25 million for the three months ended June 30. Excluding net special items, it expects a net loss of up to $ 1.2 billion and a stock loss of between $ 1.67 and $ 1.76. That compares to analyst estimates of $ 2.44 per share.
“We are clearly moving in the right direction,” said CEO Doug Parker and President Robert Isom in an employee statement.
American stock was up nearly 2% in after-hours trading Tuesday.
Air traffic has rebounded sharply since the spring, when Covid-19 vaccines became widespread in the U.S. and officials lifted restrictions blocking attractions from indoor restaurants to theme parks.
American said it flew 44 million passengers in the second quarter, an 82% increase from the first three months of 2021, albeit still below 2019 levels.
Revenue for the quarter ended last month was likely 37.5% below the same period in 2019 when it generated $ 11.96 billion, compared to an earlier estimate of a 40% decline.
American expects the daily cash build rate to be around $ 1 million per day, the first positive quarter since the pandemic began.
US airlines have at times struggled to meet the rapidly growing demand for travel.
As of March 2020, airlines have received $ 54 billion in federal payroll allowance in exchange for not laying off workers. This has contributed to staffing bottlenecks that have arisen in certain workgroups such as customer service reps and pilots.
For its part, American cut its flight schedule by 1% for the first half of July and canceled flights last month, in part due to a lack of trained and available pilots or other personnel.
“Restoring service this quickly in response to unprecedented growth in demand is incredibly complex,” write Isom and Parker. “But the Americans are facing the situation, and the results prove it.”
The airline is expected to release its quarterly results on July 22nd before the market opens.