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American Airlines Narrows Fourth-Quarter Revenue Fall Forecast

Published on Jan 18 2022 10:29 AM in General Industry tagged: American Airlines

American Airlines Narrows Fourth-Quarter Revenue Fall Forecast

American Airlines Group Inc has said that its fourth-quarter revenue fall will be narrower than it previously expected.

Revenue Expectation

The company said that it now expects revenue for the quarter to be down approximately 17% versus pre-COVID-19 pandemic levels, compared with its prior forecast of an approximately 20% fall.

Omicron Impact

A rise in COVID-19 infections of the Omicron variant has forced airlines to cancel flights as pilots and cabin crew fell sick and needed to quarantine.

Fourth-Quarter Costs

Mass cancellations over the Christmas and New Year holiday period and higher incentives given to employees had an impact on carriers, with American Airlines forecasting higher fourth-quarter costs.

The company expects cost per available seat mile excluding items - the measure in the industry showing what it costs to fly one seat one mile - to be up between 13% and 14% versus 2019, compared with its previous guidance of a rise of between 8% and 10%.

A writedown of excess spare parts inventory also increased costs, the airline added.

Impact From Capacity Cuts Somewhat Greater Than Expected

"The impact from capacity cuts were somewhat greater than we had anticipated," Raymond James Equity Research analyst Savanthi Syth said in a note.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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