Salem Radio Network News Saturday, May 21, 2022

Business

American Airlines loss narrows on strong holiday travel demand

By Rajesh Kumar Singh and Abhijith Ganapavaram

(Reuters) -American Airlines Group Inc reported a smaller fourth-quarter loss on Thursday, boosted by strong travel demand during the holiday season.

U.S. carriers benefited from millions of Americans flying in November and December, with the Transportation Security Administration screening https://www.tsa.gov/news/press/releases/2021/12/07/near-pre-pandemic-travel-volumes-expected-continue-through-december nearly 21 million travelers during the 10-day Thanksgiving holiday.

Demand during Christmas Eve and New Year’s Eve was strong as well, although mass flight cancellations towards the end of the year due to rising COVID-19 cases and inclement weather meant airlines could not fully tap that demand.

American said domestic leisure and short-haul international traffic were approaching their 2019 levels, but demand for long-haul international remained challenged.

Domestic business travel, which accounted for 30% of the company’s 2019 passenger revenue, recovered in the latest quarter to about 70% of the pre-pandemic level.

American, however, said the volatility in travel demand due to new COVID-19 variants has created “the most challenging planning environment in the history of commercial aviation”.

The carrier plans to match its capacity with bookings trends. It expects its capacity in the quarter through March to be down about 8% to 10% compared to the same period in 2019. Full-year capacity is projected to be 5% lower than in the pre-pandemic year.

Its revenue in the current quarter is estimated to be down 20% to 22% versus the first quarter of 2019 due to the Omicron coronavirus variant’s impact on demand in the first two months of the quarter.

Shares of the company were up 1.6% at $17.56 before the bell on Thursday.

Fort Worth, Texas-based American Airlines had ramped up capacity and staffing to meet the demand surge during the key season. Available seat miles, the carrying capacity of an airplane available to create revenue, rose 84% from a year earlier.

The carrier said it plans to hire another 18,000 employees this year after adding 16,000 new team members last year.

On an adjusted basis, American reported a loss of $1.42 per share for the quarter through December, compared with a loss of $3.86 per share a year ago. Analysts surveyed by Refinitiv, on average, had expected a quarterly loss of $1.48 per share.

Operating revenue for the quarter rose to $9.43 billion from $4.03 billion a year earlier.

(Reporting Rajesh Kumar Singh in Chicago and by Abhijith Ganapavaram in Bengaluru; Editing by Ramakrishnan M. and David Evans)

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