American Airlines reported a third-quarter loss and lowered its profit forecast for the year due to increased fuel prices. The carrier now expects to earn between $2.25 and $2.50 per share for the year, down from the previous estimate of $3 to $3.75, but in line with analyst expectations. American Airlines also revised its adjusted operating margin forecast to 7%, down from the previous forecast of 10%. Despite a resurgence in travel, especially for international destinations, fares have decreased compared to last year.
In the third quarter, American Airlines exceeded Wall Street expectations, recording adjusted earnings per share of 38 cents compared to the anticipated 25 cents. However, its total revenue of $13.48 billion fell short of the expected $13.52 billion. The company predicts a decrease in unit revenue and an increase in unit costs, excluding fuel, for the fourth quarter. American Airlines recorded a loss of $545 million, or 83 cents per share, marking its first loss since the first quarter of 2022. The carrier’s capacity was up 7% from the previous year.
CEO Robert Isom acknowledged the challenges, particularly higher fuel costs, but expressed confidence in the team’s ability to navigate the environment. Adjusted for higher costs associated with the pilots’ new labor agreement, the company reported earnings of $263 million, or 38 cents per share. Despite the loss, revenue increased by 0.1% compared to the year-ago period. American Airlines will hold a call with analysts and media to discuss the financial results and its outlook.