(Reuters) -American Airlines Group Inc expects to report its first pretax quarterly profit since the onset of the pandemic as booming travel demand helps it offset mounting costs, the carrier said on Tuesday.
Major U.S. airlines are poised to post their strongest earnings starting Wednesday, helped by a surge in bookings driven by pent-up demand even as they grapple with higher jet fuel costs and labor shortages.
The carrier expects total revenue per available seat mile to be up about 22.5% amid a lower-than-planned capacity, as its pricing power gains momentum.
“American Airlines’ overall guidance looks modestly positive, with revenue stronger than expected, even though ex-fuel seat mile cost and jet fuel kerosene expense pressure look a little worse than expected,” said Citi analyst Stephen Trent
The Fort Worth, Texas-based company expects fuel expenses to average between $4.00 and $4.05 per gallon compared with its previous forecast of $3.92 to $3.97 per gallon.
Revenue in the quarter is expected to rise by about 12% to 13.39 billion from the same period in 2019. The company had earlier forecast second-quarter revenue between 11% and 13%.
The carrier expects to earn a pre-tax income of $585 million in the quarter.
(Reporting by Aishwarya Nair and Kannaki Deka in Bengaluru; Editing by Vinay Dwivedi)
