American Airlines Stock Slides On Q2 Profit Miss, Reduced Capacity Plans

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Updated at 9:48 am EST

American Airlines  (AAL) – Get American Airlines Group Inc. Report posted modestly softer-than-expected second quarter earnings Thursday but followed its rival carriers in keeping capacity plans in check as the industry grapples with surging fuel costs and staff shortages. 

American said its adjusted profit for the three months ending in June was 76 cents per share, up from a loss of $1.69 per share over the same period last year and a penny shy of the Street consensus forecast. Group revenues were pegged at a record $13.4 billion, nearly double the tally recorded over the pandemic-era period last year and largely in-line analysts’ forecasts.

Looking into the current quarter, American said it expects revenues to rise by between 10% and 13% from 2019 levels, even as it sees capacity falling by between 8% and 10%. Full year capacity, American said, will be down by between 7.5% and 9.5% from 2019 levels.

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“We are very pleased to report a quarterly profit, excluding net special items, for the first time since the start of the pandemic, driven by the strong demand environment and the hard work of our team,” said CEO Robert Isom. 

“The American Airlines team has stepped up to meet the surge in demand for air travel while running a reliable operation in very challenging conditions,” he added. “We are encouraged by the trends we’re seeing across the business, and we remain well-positioned for the continued recovery.”  

American Airlines shares were marked 7.2% lower in early trading immediately following the earnings release to changes hands at $14.16 each.

Rival carriers Delta Air Lines DAL and United Airlines UAL were both impacted by fuel and staffing costs with Delta posting narrower second quarter profit margins and holding its capacity levels in place.

United echoed that sentiment, saying it expects the travel boom to “more than offsetting economic headwinds — leading to expected revenue and earnings acceleration in the third quarter,” but won’t increase capacity between now and the end of the year as it works to build staffing levels and keep a lid on costs.

.United swung to profit last quarter, its first since without federal government support since the 2020 pandemic, but its adjusted earnings of $1.45 missed Street forecasts by more than 50 cents. Revenues were solid at 12.1 billion, but a 45% surge in fuel costs, as well as ongoing staff and pilot shortages, ate into its bottom line.