American Airlines beats profit estimates, sees strong holiday bookings

AMERICAN Airlines on Thursday (Oct 19) beat estimates for third-quarter adjusted profit and said bookings for the upcoming holiday season have been stronger than last year.

US airlines with international operations are seeing relentless demand for long-haul flights as a stronger dollar encourages more Americans to plan trips abroad for leisure and recreation.

“I see demand, especially as we approach the holidays, very strong,” chief executive officer Robert Isom said on Thursday in an interview with CNBC. “Overall, I feel really good about where demand is, not just now. People want to connect. People want to travel.”

American Airlines reported an adjusted profit of 38 US cents per share for the quarter ended Sept 30, beating analysts’ average estimates of 25 US cents per share, according to LSEG data.

However, the Fort Worth, Texas-based company cut its forecast for the year as it grapples with higher expenses.

Jet fuel prices increased in the quarter through September due to tight oil supplies, raising operational costs for carriers.

It now expects an adjusted profit of US$2.25 per share to US$2.50 per share for the year, compared with its previous forecast of US$3 to US$3.75 per share.

Carriers have also handed out costly contracts to retain workers. American Airlines had warned in August that third-quarter costs would rise following a new labour deal with its pilots that included more than US$9.6 billion in total pay and benefits increases over four years.

The company expects its fourth-quarter total revenue per available seat mile (TRASM), a proxy for pricing power, to be down about 5.5 per cent to 7.5 per cent, compared with the year-earlier period.

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The carrier’s total operating revenue marginally rose to US$13.48 billion. Analysts were expecting a total operating revenue of US$13.52 billion. REUTERS