DALLAS — American Airways posted a $545 million loss for the third quarter as income was flat with final summer season and prices rose, particularly to cowl a brand new contract with its pilots.
American minimize its forecast of full-year earnings to between $2.25 and $2.50 per share, down from a earlier forecast of $3 to $3.75 per share.
The outcomes introduced Thursday contrasted with these of American’s two closest rivals. United Airways and Delta Air Strains each reported rising income and revenue of $1.1 billion for the quarter, which spans a lot of the height vacation-travel season.
Journey has been booming popping out of the pandemic. Final 12 months, People snapped up tickets for journey inside america; this 12 months, a profitable chunk of that demand has shifted to worldwide flights.
With its income flat in contrast with a 12 months in the past, American seems to be rethinking its growth of recent routes, which regularly take time to develop into worthwhile — and generally by no means do.
“We all know there are issues that we may have finished in another way over the previous summer season that we’ll be sure that we’re addressing when it comes to the place we’re flying and the way we’re doing it,” CEO Robert Isom mentioned on a name with analysts. American could have “little or no tolerance” for developmental routes, he mentioned. “We will fly the place we earn cash.”
American’s third-quarter loss in contrast with a revenue of $483 million in the identical quarter final 12 months. The airline mentioned the outcomes had been dragged down by $983 million in fees for contract-ratification bonuses paid to pilots in August.
American Airways Group Inc., based mostly in Fort Price, mentioned earnings excluding particular gadgets labored out to 38 cents per share. Analysts anticipated 25 cents per share, in keeping with a FactSet survey.
Income of $13.48 billion was barely under Wall Road forecasts and flat with final summer season. Against this, United and Delta reported income good points of 12% and 11%.
American’s chief monetary officer, Devon Might, mentioned it was a matter of timing — that American grew extra rapidly final 12 months, however this 12 months, United and Delta “had been catching up” and added extra flights that boosted income.
Labor prices at American jumped 17%, a rise of practically $600 million, which was roughly offset by decrease gas costs than a 12 months in the past.
There are already issues over rising prices for airways as gas costs surge on the identical time that journey has begun to gradual. Gas costs are nonetheless decrease than they had been final 12 months, however the loss at American may add to nervousness over burdensome prices throughout the trade.
Citing rising gas costs on Wednesday, United gave a surprisingly weak end-of-year forecast after a stable third quarter, sending shares of the main carriers decrease. United additionally famous the suspension of its flights to Tel Aviv due to the Israel-Hamas battle.
American, which took on new debt through the pandemic, mentioned it paid down $1.4 billion in debt through the quarter.
Shares of American rose 2.6% in noon buying and selling.