American Airlines forecasts higher profit on strong holiday travel demand
Jan 12 (Reuters) - American Airlines Group Inc (AAL.O) on Thursday forecast a higher fourth-quarter profit on strong demand for travel during the key holiday season, sending its shares up more than 5% in premarket trading.
The upbeat forecast comes at a time when a worsening economic outlook coupled with high inflation has sparked concerns about consumer demand.
Shares of other airlines including Delta Air Lines Inc (DAL.N), Southwest Airlines Co (LUV.N) and United Airlines Holdings Inc (UAL.O) were also up between 1% and 3% premarket.
The fourth quarter was difficult for several U.S. carriers as an industry-wide pilot shortage made it tougher for carriers to ramp up capacity and capitalize on a booming travel demand.
During the fourth quarter, American Airlines' capacity was down 6.1% versus the fourth quarter of 2019, and near the mid-point of its prior guidance of a 5% to 7% fall.
American Airlines expects to report fourth-quarter adjusted earnings per diluted share between $1.12 and $1.17, compared with its prior guidance of $0.50 to $0.70. Analysts had expected a profit of 60 cents, according to Refinitiv data.
The company also forecast a rise between 16% and 17% in revenue from the fourth quarter of 2019. It had earlier forecast revenue growth of 11% to 13%.
It expects costs, excluding fuel, to be up for the fourth-quarter about 10% at the higher end of its previous forecast of 8% and 10%.
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