NEW YORK: American Airlines reported another quarterly loss Thursday, but said a recent sharp improvement in bookings should enable it to achieve profitability in the second quarter.
The big US carrier joined rivals Delta Air Lines and United Airlines in predicting an imminent return to profitability as consumers shake off Covid-19 restrictions and go back to traveling.
Airlines have described a pronounced improvement in demand in March after the Omicron Covid-19 wave depressed travel earlier in the quarter.
“The demand environment is very strong, and as a result, we expect to be profitable in the second quarter based on our current fuel price assumptions,” said Chief Executive Robert Isom.
Airlines have struggled for more than two years, downsizing staff and surviving a cash-burning period with help from US government support programs and the private debt market.
In the first quarter, American reported a loss of $1.6 billion in the first quarter, compared with a loss of $1.3 billion in the year-ago period.
Revenues more than doubled to $8.9 billion.
American expects second-quarter revenues to exceed those from the pre-pandemic 2019 period by six to eight percent. It sees a 14 to 16 percent rise in total revenue per available seat mile, a closely-watched benchmark.
One concern facing the industry is the drag from higher jet fuel prices, which have skyrocketed in the wake of the jump in oil prices following the Russian invasion of Ukraine.
Some carriers have also struggled to retain enough labor to manage the uptick in travel. But American expressed confidence in its staffing, pointing to 12,000 hires since last summer. Shares of American jumped 10.9 percent to $21.60 in pre-market trading.
Comments
Comments are closed.