American Airlines Expects To Be Profitable In Q2 Based On Current Fuel Price Assumptions

While reporting quarterly results on Thursday, American Airlines Group Inc. (AAL) said, based on current trends, the company expects second-quarter capacity to be approximately 92% to 94% of what it was in the second quarter of 2019. American expects second-quarter total revenue to be 6% to 8% higher than the second quarter of 2019. The company expects to be profitable in the second quarter based on the current demand trends and fuel price forecast.

The airline noted that it produced record sales in March, and it was the first month since the onset of the pandemic that total revenue was above 2019 levels. The company was profitable excluding net special items in March.

First quarter net loss was $1.64 billion, or $2.52 per share compared to a loss of $1.25 billion, or $1.97 per share, prior year. Excluding items, American Airlines posted an adjusted loss of $1.51 billion or $2.32 per share for the period. Analysts on average had expected the company to post a loss of $2.40 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

The company's revenue for the quarter rose 121.9% to $8.90 billion from $4.01 billion last year. This included passenger revenues of $7.8 billion, and cargo revenues of $364 million. The company noted that its first-quarter revenue represented a recovery to 84% of comparable period revenue in 2019. Analysts on average had estimated $8.83 billion in revenue.

American ended the first quarter with $15.5 billion of total available liquidity. The company said it remains on track to reduce overall debt levels by $15 billion by the end of 2025.

"Our priorities for this year are clear: Run a reliable operation and return to profitability," said CEO Robert Isom.

Shares of American Airlines were up 10% in pre-market trade on Thursday.

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