American Airlines Group (NASDAQ:AAL) reported strong second-quarter earnings thanks to a strong start to the busy travel season.
The Fort Worth-based airline reported revenue of $14.06 billion, up 4.7% year-over-year and topping Street expectations of $13.74 billion. Earnings were $1.92 per share, up from $0.68 per share a year early and above expectations of $1.59. Flying capacity was up 5.3%.
Looking ahead, American upped its full-year earnings projection to between $3 and $3.75 per share from a May forecast of between $2.50 and $3.50.
CEO Robert Isom is optimistic about travel demand this year.
“Our operation is performing at historically strong levels, and we have worked to refresh our fleet and build a comprehensive global network, all of which helped to produce record revenues in the second quarter,” Isom said in a statement. “We will build on this momentum the rest of the year and continue to prioritize reliability, profitability, accountability and strengthening our balance sheet.”
However, investors may be focusing more on the fact that the company expects third-quarter unit revenues to drop up to 6.5% from a year earlier. Shares of American Airlines slid 2.5% Thursday morning.
There could also be skepticism over American Airlines’ ability to get a deal done with its pilots union. The union is looking for improvements to a tentative contract deal, in the wake of an agreement reached with rival United Airlines.
Isom has said American Airlines will match wages for its pilots.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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