American Airlines posts $ 1.6 billion loss, but has better forecasts

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Dallas (AP). American Airlines suffered a loss in the first quarter of this year. However, the airline said Thursday that it anticipates becoming profitable in the spring, as travel demand increases.

In early trading, before the market opened, the airline’s share increased by more than 10%

The Omicron variant of Omicron caused an increase COVID-19 cases earlier in the year. However, passengers returned to air travel in March and American claimed it earned that month, minus certain items.

Revenues more than doubled compared to a year ago, returning at 84% from the preepidemic levels since the beginning 2019

Robert Izum, the new CEO, stated that “the demand environment is very strong” and predicted profitability in the second quarter, based on current fuel price discounts. This statement was made in Fort Worth, Texas.

The airline claimed that it was receiving a boost from the removal of travel restrictions due to the plague and improvements in business travel. American stated that company orders are at their highest level since the outbreak of the plague.

Higher revenues mean higher fuel costs and higher labor costs. American’s fuel costs more than doubled in comparison to last year, while wages rose by more than 15%.

American’s optimistic view of the remainder of 2022 mirrors the optimism of Delta Air Lines (and United Airlines), which also predicted that they would be making full-year profit as travel recovers from the effects of the disease.

However, the first quarter was not as bright. It began with large flight cancellations caused by winter storms, and high numbers departing Omicron pilots and flight attendants. The version ended in the fourth quarter. Revenue increased and cancellations fell.

American stated that it lost $ 2.32 per Share, excluding special items. This is slightly more than the average loss forecast of $ 2.43 per Share, according to Zacks Investment Research’s study of eight analysts.

The loss was still greater than that of US$ 1.25 billion a year ago.

Revenue grew to $ 8.9 million

American Airlines Group shares have increased 8.5% in the past year, as of Wednesday. In the past 12 month, the stock has dropped slightly by more than 4%.

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This story was created by Automated Insights (http://automatedinsights.com/ap) using data from Zack Investment Research. Access the Zacks Stock Report on AAL at https://www.zacks.com/ap/AAL

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