The carrier also reduced its flying schedule for the third quarter.
For the second quarter, American Airlines Group (NASDAQ: AAL) posted an adjusted profit of 76 cents a share, slightly missing predictions of 77 cents.
The business anticipates maintaining its profit margin in the third quarter. Although the airline anticipates a 10–12% increase in revenue from the third quarter of 2019, it anticipates an 8–10% decrease in flying capacity.
As a result of the “strong demand climate” and “the hard work of our team,” American’s CEO Robert Isom is “extremely delighted to announce a quarterly profit, excluding net extraordinary items,” for the first time since the pandemic began.
Year-over-year sales growth of 12.2 percent to a record $13.4 billion was higher than the $13.31 billion average forecast and in line with projections released last week. American said that second-quarter 2019 domestic leisure travel patterns were “extremely good,” exceeding 2019 levels. The airline also saw an increase in income from corporate and government customers.
Increases in fuel prices contributed significantly to a 45.3% year-over-year increase in operating expenses per available seat mile. Typically, a gallon of petrol costs about $4.03, up from $1.91 in the same period a year earlier. Overall operating costs increased by 76.3 percent per year to $12.4 billion.
In Thursday morning’s premarket trade, American stocks fell $2.91, or 3.01%, to $14.77. The stock price is down 15% so far this year.
American Airlines is not the first airline to reduce service. On Wednesday, United Airlines Holdings (UAL) said it would be scaling down its flight expansion ambitions due to persistent macroeconomic concerns, including rising fuel costs. The company’s profits per share for the second quarter were much lower than expected. United stock was down over 8 percent before Thursday’s opening bell.
Delta Air Lines (DAL) reported a loss in profits last week and said that it expects expenses to rise by around 22 percent in the next quarter compared to the same period in 2019. However, management said it continues to anticipate robust demand throughout the year and was positive about the airline’s ability to pass costs on to customers via increased ticket pricing.