American Airlines Reports Loss But Outlook for Q2 is Promising

American Airlines Plane (Credits: American Airlines)

American Airlines reported a loss in the first quarter, but its outlook for the current period exceeded analysts’ expectations.

For the second quarter, American anticipates earning between $1.15 and $1.45 per share on an adjusted basis, significantly surpassing the $1.18 average estimate compiled by LSEG analysts. The airline reiterated its full-year earnings forecast of $2.25 to $3.25 per share.

CEO Robert Isom expressed confidence despite the first-quarter 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.”

American Airlines (Credits: Quintin Soloviev)

American Airlines projects second-quarter capacity to increase by 7% to 9%, with unit revenues expected to decline by 1% to 3% compared to the previous year.

Like Southwest, United, and Alaska, American faces challenges due to Boeing’s recent quality control and safety issues. Isom noted that American will receive seven fewer aircraft from Boeing than initially projected but anticipates no significant impact from the delays.

He urged Boeing to address the issues promptly, stating, “My message is Boeing hasn’t changed since the last time we talked. Get your act together. Deliver.”

American Airlines Plane (Credits: American Airlines)

In the first quarter, American Airlines performed as follows compared to Wall Street estimates:

– Adjusted loss per share: 34 cents, compared to an expected loss of 29 cents
– Revenue: $12.57 billion, slightly lower than the expected $12.60 billion

During the first quarter, American reported a loss of $312 million, or 48 cents per share, compared to a profit of $10 million, or 2 cents per share, in the same period last year.

Adjusted for one-time items, including costs associated with new labor contracts, the airline reported a loss of $226 million, or 34 cents per share.

Operating expenses increased by nearly 7%, primarily due to an 18% rise in salaries and related costs. Despite this, revenue rose by 3.1% to $12.57 billion.

Jessica Smith
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