April 27 (Reuters) – American Airlines (AAL.O) on Thursday forecast better-than-estimates second-quarter earnings as travel demand remains strong in the face of a looming recession.
Major airlines are riding the strongest travel wave since the start of the COVID-19 pandemic with more people flying despite rising airfares and shrinking budgets due to high inflation.
The company expects adjusted earnings of $1.20 per share to $1.40 per share for the quarter compared with the median analyst estimate of $1.04 per share.
Ticket prices have risen on strong demand as countries ease restrictions and corporate travel resumes, helping airlines mitigate rising costs from rising jet fuel prices and higher labor costs.
Airlines are looking to capitalize on the strong summer travel boom, as international travel recovers at a faster rate compared to domestic travel.
The company reported a first-quarter net profit of $10 million, or $0.02 per share, compared with a loss of $1.6 billion, or $2.52 per share, a year earlier.
Analysts expect a bleak economic outlook for 2023, but airline executives have remained bullish on travel demand.
Total operating income for the Fort Worth, Texas-based airline rose 37% to $12.19 billion.
Reporting by Shivansh Tiwary in Bengaluru Edited by Vinay Dwivedi
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