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American Airlines (AAL) earnings Q4 2022

American Airlines employees help check in passengers on the airport. Ronald Reagan Washington DC, January 11, 2023 in Arlington, Virginia.

Alex Wong | Getty Images

american airlinesFourth-quarter profit beat analysts’ expectations as strong travel demand and high prices boosted performance amid a turbulent holiday season.

Here’s how American Airlines fared in fourth quarter in comparison with Wall Street’s predictions, based on the typical of Refinitiv’s analyst estimates:

  • Adjusted earnings per share: $1.17 versus the expected $1.14
  • Total income: USD 13.19 billion in comparison with the expected USD 13.20 billion

For the three months ended December 31, the corporate posted unadjusted net income of $803 million, or $1.14 per share, a marked improvement over a lack of $931 million, or $1.44 per share, including same period a 12 months earlier.

Quarterly revenue of $13.19 billion was up 16.6% over the identical period in 2019, before the Covid pandemic made travel difficult. American earlier this month raised its fourth-quarter revenue and earnings estimates.

American shares closed 2% higher on Thursday.

Americans posted record revenue within the fourth quarter despite operating 6.1% less, suggesting Flyers are still paying for seats.

For the complete 12 months, American reported $127 million in net income. This is the carrier’s first full-year profit since 2019, CEO Robert Isom said in a message to employees Thursday morning.

The company paid a mean of $3.50 a gallon of fuel within the fourth quarter, up 48% from last 12 months. It expects the price to drop to between $3.33 and $3.38 per gallon in the primary quarter of 2023.

Based on these cost estimates and the direction demand is taking, American said it expects production capability to be 8% to 10% higher than in the primary quarter of 2022.

Airline executives at Delta and United were similarly optimistic about bookings for 2023, despite concerns about layoffs at major US firms and economic weakness.

US and other airlines have highlighted capability constraints related to aircraft shortages and pilot shortages, particularly with regional airlines, aspects which have kept air fares high.

Isom said throughout the company’s earnings call that major pilot constraints ought to be eased this 12 months, but regional pilot shortages should proceed for several more years. American said it plans to rent 2,000 pilots for its fundamental operation this 12 months.

The Fort Worth, Texas-based airline said its unit costs are prone to stay flat or fall by as much as 3% in the primary quarter in comparison with a 12 months earlier and increase by as much as 5% throughout 2022.

The full-year forecast includes latest employment contracts, although the carrier has not yet reached initial arrangements with pilots and stewards.

Among the biggest US carriers, only Delta has a preliminary agreement with its airmen.

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