Receive $80 Grab vouchers valid for use on all Grab services except GrabHitch and GrabShuttle when you subscribe to BT All-Digital at only $0.99*/month.
Find out more at btsub.sg/promo
[NEW YORK] American Airlines Group Inc on Tuesday forecast massive fuel savings in 2015 but negative unit revenue, sending its shares down more than two per cent in morning trading.
The airline, the world's largest by passengers since it merged with US Airways in 2013, expects its consolidated fuel expense to improve by US$5 billion in 2015, its Chief Financial Officer Derek Kerr said during the company's quarterly earnings call. It expects to pay between US$1.71 and US$1.76 per gallon in 2015, down from an average US$2.52 last quarter.
Yet it forecast a two to four per cent decline in unit revenue for the first quarter year-over-year. By contrast, competitors such as United Airlines said last week that they expect their unit revenue to be flat year-over-year, between negative one per cent and positive one per cent.
Passenger revenue per available seat mile "is being pressured in a number of markets where capacity is growing faster than demand," American Airlines President Scott Kirby said during the quarterly call.
"Higher year-over-year completion factor will be an earnings positive but will negatively impact PRASM, and we expect currency headwinds in all international regions from the strengthening dollar."
The Fort Worth-based carrier forecast its total system capacity in 2015 to grow about two to three per cent over 2014, primarily due to adding seats to its planes and to a higher completion factor.
It expects its first-quarter pre-tax margin to be between 13 and 15 per cent.