American Airlines Shares rose more than 4% in morning trading on Thursday after the carrier raised its revenue and profit estimates for the fourth quarter due to strong demand and higher fares.
Shares of other airlines also gained momentum.
US Estimates revenue rose 17% compared to the same period in 2019, up from a previous forecast of 11% to 13% growth compared to the period three years ago. covid pandemic,
American said revenue per seat mile is expected to climb 24% in the 2019 quarter, up from its prior forecast of 18% to 20%.
It expects to report adjusted earnings per share of between $1.12 and $1.17, up from its previous estimate of between 50 cents and 70 cents.
Thursday’s update is the first sign of how a major airline faced a rocky end to the year after severe weather caused mass cancellations around the US during the busy holiday travel season. American is scheduled to report full results on January 26. Delta Airlines is set to announce quarterly results on Friday morning.
American’s new CFO Devon May, who started in that role on Jan. 1, told CNBC that bookings are currently coming in as expected.
The Fort Worth-based airline anticipates a 10% increase in unit costs excluding fuel.
High costs, staffing issues and aircraft shortages have eaten into the airline’s profits over the past year.
“The No. 1 thing is to get aircraft utilization back to historic levels,” May said, adding that the carrier is getting closer to this in its mainline operations, though it is more difficult at regional partners, where pilot shortages are more acute. .
Other carriers are also looking for ways to cut costs. For example, jetblue airways Earlier this week it told pilots to try to save fuel by taxiing with one engine and connecting ground power quickly to reduce reliance on auxiliary power systems. It also suggested employees pack light.
JetBlue told pilots Tuesday that cutting aircraft weight by 30 pounds per flight could save $1 million annually.
“It may sound silly, but we are what matters,” JetBlue said in a pilot memo, which was seen by CNBC. “While we all have travel essentials, it’s important to pack what you need and leave what you don’t need at home.”