American Airlines sees revenue recovery but higher costs too

Apr 12, 2022, 7:51 AM | Updated: 2:48 pm
The American Airlines logo on top of the American Airlines Center in Dallas, Texas on Dec. 19, 2017...

The American Airlines logo on top of the American Airlines Center in Dallas, Texas on Dec. 19, 2017. At American Airlines, revenue is higher than expected but so are costs. The airline said Tuesday, April 12, 2022 that first-quarter revenue will be a tick better than Wall Street expected. That's an indication that demand for travel has been strong and fares are rising. However, revenue is still expected to be 16% below pre-pandemic levels in 2019. And costs are rising faster than American expected just a month ago. (AP Photo/ Michael Ainsworth, file)

(AP Photo/ Michael Ainsworth, file)

FORT WORTH, Texas (AP) — American Airlines said Tuesday that first-quarter revenue, while not back to pre-pandemic levels, will probably be better than Wall Street expected on strong travel demand. However, spending on labor and jet fuel are rising at the same time.

The mixed outlook from American could provide a hint of what other airlines will say when they begin reporting financial results for the quarter, starting with Delta Air Lines on Wednesday.

American said revenue will likely be down 16% from two years ago, slightly better than the 17% difference it had forecast earlier. That would work out to $8.89 billion, which is slightly above the $8.87 billion consensus among analysts were surveyed by FactSet.

The airline said spending in the quarter also would be slightly higher than it projected less than a month ago, and up to 13% above the same quarter of 2019. American has been adding workers after struggling with its operation at times last summer and fall. Fuel prices are also 7 cents per gallon higher than expected – not an insignificant amount, since the company estimated that it burned 895 million gallons in the first quarter.

Wall Street expects American, which is based in Fort Worth, Texas, to post a loss of $2.40 per share in the quarter when it reports results on April 21.

Shares of American Airlines Group Inc. rose about 1% in morning trading.

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American Airlines sees revenue recovery but higher costs too