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American Airlines (AAL) Lifts Q1 Revenue View on Upbeat Demand
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American Airlines (AAL - Free Report) improved its total revenue guidance for the first quarter as air-travel demand continues to rebound. However, with rising fuel prices and labor costs, the company increased unit cost guidance and fuel price estimate.
Per a SEC filing dated Apr 12, American Airlines expects total revenues to decline approximately 16% in first-quarter 2022 from the comparable period in 2019. This is better than the company’s previous view of an approximate decrease of 17%.
Amid the Russia-Ukraine war, fuel prices are soaring. AAL now estimates fuel cost per gallon to be $2.80-$2.85 in the first quarter compared with $2.73-$2.78 anticipated previously.
With travel demand rebounding, airlines are boosting hiring efforts. This is pushing up labor costs. American Airlines predicts cost per available seat mile (CASM), excluding fuel and net special items, to increase 12-13% in the first quarter from the 2019 level, compared with 11-13% rise anticipated previously.
Capacity, measured by available seat miles, is expected to decline 10.7% in the first quarter from the 2019 level compared with a fall of 10-12% anticipated earlier.
For the first quarter, American Airlines forecasts pre-tax margin of (24.4%)-(23.1%), while adjusted pre-tax margin is estimated to be (22.6%)-(21.3%).
AAL expects to end the first quarter with total available liquidity of approximately $15.5 billion.
Zacks Rank & Key Picks
American Airlines carries a Zacks Rank #3 (Hold). Some better-ranked stocks within the broader Transportation sector are as follows:
Golar LNG Limited (GLNG - Free Report) carries a Zacks Rank #1 (Strong Buy). The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the past four quarters while missing the same in one. The average beat was 49.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Golar LNG have rallied more than 100% in a year’s time.
Matson (MATX - Free Report) also carries a Zacks Rank #1. The company’s earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters (in-line in one), the average beat being 3.6%.
Shares of Matson have gained more than 25% in a year’s time.
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American Airlines (AAL) Lifts Q1 Revenue View on Upbeat Demand
American Airlines (AAL - Free Report) improved its total revenue guidance for the first quarter as air-travel demand continues to rebound. However, with rising fuel prices and labor costs, the company increased unit cost guidance and fuel price estimate.
Per a SEC filing dated Apr 12, American Airlines expects total revenues to decline approximately 16% in first-quarter 2022 from the comparable period in 2019. This is better than the company’s previous view of an approximate decrease of 17%.
Amid the Russia-Ukraine war, fuel prices are soaring. AAL now estimates fuel cost per gallon to be $2.80-$2.85 in the first quarter compared with $2.73-$2.78 anticipated previously.
American Airlines Group Inc. Price
American Airlines Group Inc. price | American Airlines Group Inc. Quote
With travel demand rebounding, airlines are boosting hiring efforts. This is pushing up labor costs. American Airlines predicts cost per available seat mile (CASM), excluding fuel and net special items, to increase 12-13% in the first quarter from the 2019 level, compared with 11-13% rise anticipated previously.
Capacity, measured by available seat miles, is expected to decline 10.7% in the first quarter from the 2019 level compared with a fall of 10-12% anticipated earlier.
For the first quarter, American Airlines forecasts pre-tax margin of (24.4%)-(23.1%), while adjusted pre-tax margin is estimated to be (22.6%)-(21.3%).
AAL expects to end the first quarter with total available liquidity of approximately $15.5 billion.
Zacks Rank & Key Picks
American Airlines carries a Zacks Rank #3 (Hold). Some better-ranked stocks within the broader Transportation sector are as follows:
Golar LNG Limited (GLNG - Free Report) carries a Zacks Rank #1 (Strong Buy). The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the past four quarters while missing the same in one. The average beat was 49.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Golar LNG have rallied more than 100% in a year’s time.
Matson (MATX - Free Report) also carries a Zacks Rank #1. The company’s earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters (in-line in one), the average beat being 3.6%.
Shares of Matson have gained more than 25% in a year’s time.