American Airlines lost $1.64 billion in the first quarter, a bigger loss than a year ago, but said Thursday it expects to turn profitable in the spring as travel demand picks up.
Shares of the airline rose 5.7% to 20.59 in midday trade.
Air travel was dampened earlier in the year by the Omicron variant, which led to a spike in COVID-19 cases, but passengers returned in March, and American said it had made a profit that month, excluding certain ones Article.
Sales more than doubled year over year, returning to 84% of pre-pandemic levels as of early 2019.
“The demand environment is very strong and as a result we expect to be profitable in the second quarter based on our current fuel price assumptions,” new CEO Robert Isom said in a statement for the Fort Worth, Texas-based airline.
The airline said it is getting a boost from easing pandemic travel restrictions and improving business travel, which has been a weak point for airlines. According to American, corporate bookings were the highest since the pandemic began.
However, along with higher revenues, airlines are facing higher fuel and labor costs. American’s fuel bill more than doubled from a year ago, and labor costs rose more than 15%.
American’s upbeat comment on the remainder of 2022 echoed comments from Delta Air Lines and United Airlines, both of which predicted they will post year-round gains as travel continues to recover from the depths of the pandemic.
However, the first quarter was less rosy. It started with massive flight cancellations due to winter storms and many pilots and flight attendants traveling at omicron. As the quarter progressed, cancellations fell and revenue rose as the variant waned.
American, excluding special items, said it lost $2.32 a share, according to a Zacks Investment Research poll of eight analysts, slightly better than the median forecast of an adjusted loss of $2.43 a share.
Still, the loss was larger than American’s $1.25 billion loss a year earlier.
Revenue rose to $8.9 billion.
As of Wednesday, shares of American Airlines Group were up 8.5% year-to-date. The stock is down a little over 4% over the past 12 months.
https://nypost.com/2022/04/21/american-airlines-lost-1-6b-in-first-quarter-but-expects-travel-demand-to-pick-up/ American Airlines lost $1.6 billion in the first quarter but expects travel demand to pick up