American Airlines Forecasts Profit for 2nd Quarter As Travel Business Shows Uptrend

American Airlines (AAL.O) announced on Thursday a current-quarter profit forecast that surpasses analysts’ expectations, buoyed by a resurgence in business travel and anticipated strong demand during the upcoming summer season.

In premarket trading, shares of the carrier rose by 5.3% to $14.66.

The resurgence in corporate reservations, particularly from large companies increasing work-related travel expenses, has contributed to the positive outlook. This segment of customers had been notably absent during the initial surge in travel following the pandemic.

American Airlines
American Airlines Plane – Business Class (Credits: American Airlines)

According to the International Air Transport Association, global travel is expected to rebound, with an estimated 4.7 billion people traveling in 2024 compared to 4.5 billion in 2019. In the United States, passenger traffic is forecasted to reach an all-time high this year, as indicated by Airlines for America, a trade group.

For the quarter ending June 30, the company anticipates adjusted profit to range between $1.15 per share and $1.45 per share. Analysts’ estimates, based on LSEG data, had projected earnings of $1.18 per share.

Executives from the airline have also highlighted strong travel demand for both domestic and international routes during the summer.

American Airlines Plane (Credits: American Airlines)

However, American Airlines, based in Fort Worth, Texas, reported a wider-than-expected adjusted loss of 34 cents per share for the first quarter, compared to analysts’ expectations of a loss of 29 cents per share.

CEO Robert Isom commented on the financial results, stating, “While we aren’t satisfied with our first-quarter financial results, we have a strong foundation in place, and we remain on track to deliver on our full-year financial targets.”

The carrier maintains its full-year adjusted profit expectations between $2.25 per share and $3.25 per share.

Total operating revenue for the airline increased by 3.1% to $12.57 billion, slightly below Wall Street expectations of $12.6 billion.

Josh Alba
Josh Alba
Josh Alba stands at the forefront of contemporary business journalism, his words weaving narratives that illuminate the intricate workings of the corporate world. With a keen eye for detail and a penchant for uncovering the underlying stories behind financial trends, Josh has established himself as a trusted authority in business writing. Drawing from his wealth of experience and relentless pursuit of truth, Josh delivers insights that resonate with readers across industries.
Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x