Dallas Oct. 21 (U.S.): The three largest US airlines had a great summer, raking in more than $2 billion in combined profits as Americans crowded on planes despite fares that were much higher than last year.
American Airlines said Thursday that it earned $483 million in record revenue that exceeded higher fuel costs in the third quarter. American expects earnings to continue to exceed Wall Street expectations through the remainder of the holiday-filled 2022, the Associated Press (AP) reports.
However, the results from America were not as great as the numbers from its more prosperous competitors. United Airlines reported $942 million in profit Tuesday, and Delta Air Lines reported third-quarter profit of $695 million last week.
It is clear that many people are eager to travel after most of them stopped during the first part of the pandemic. Executives at all three major US airlines said they see no indication that consumer concerns about inflation and the economy are hurting ticket sales.
“US third-quarter results, including our record revenue performance, are significant given the macroeconomic uncertainty facing a lot of people,” CEO Robert Isom said on a call with analysts and reporters. ‘Demand is still strong.’
American, which is based in Fort Worth, Texas, expected fourth-quarter earnings to range between 50 cents and 70 cents a share, which would beat Wall Street’s forecast of 19 cents a share.
Air travel in the United States is back from its lows in early 2020. Last Sunday, the Transportation Security Administration examined nearly 2.5 million passengers in a single day, the busiest day at the nation’s airports since February 2020.
Travel is booming despite a 43% jump in airfares last year, according to government figures.
One reason for the price hike is that the number of flights has not returned to pre-pandemic levels, leaving consumers competing for fewer seats. The United States, for example, was 10% less flying in the third quarter than it was in the same period in 2019.
American said it plans to run at 95% to 100% of 2019 levels next year. This is in line with Delta, which expects to restore its full schedule by next summer. United recently announced that it will expand its travels to Europe next summer.
Isom said America may add more flights next year but will take a cautious approach. America, Delta and others canceled flights earlier this year when they did not have enough staff, especially pilots.
“We’re going to make sure that we don’t outgrow what we have, whether in terms of aircraft delivery if that’s the limitation, or if pilots are regional or our ability to train pilots” in the United States, he said.
For the third quarter, American said its adjusted earnings, which does not include some items, were 69 cents a share, compared with the FactSet polled analysts’ expectations of 54 cents a share.
Revenue rose to $13.46 billion, slightly more than the $13.36 billion analysts had expected. American, which has major central operations in Miami and operates several flights to the Caribbean, said it lost about $40 million in revenue due to hurricanes Fiona and Ian in September.
Also on Thursday, Alaska Airlines’ parent company reported earnings of $40 million in the third quarter of last year, posting a record $2.8 billion in revenue. The Seattle-based airline said, however, that non-fuel costs in the fourth quarter will be higher than expected due to three new contracts with union work groups including pilots.
American Airlines Group Inc. shares closed. down 4% and Alaska Air Group Inc. by 5%, while Delta, United and Southwest shares fell by smaller percentages.
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