December 3, 2023

American Airlines Boeing 787-9 Dreamliner takes off from Barcelona Airport on February 24, 2023.

Jane Valls | Noor Photos | Getty Images

American airlines After a strong start to the travel season, it raised its 2023 profit forecast on Thursday, the latest airline to reap the rewards of a continued demand boom.

The Fort Worth, Texas-based airline expects full-year earnings of $3 to $3.75 a share, adjusting for one-time items, up from a May forecast of about $2.50 to $3.50 a share. The updated 2023 profit guidance was in line with Wall Street expectations of $3.10, according to a Refinitiv consensus forecast.

Airline executives are optimistic about travel demand, especially international travel. Some fares have fallen compared with last year, when airlines struggled to rebuild flight schedules during the worst of the pandemic, leaving travelers with fewer flights and fewer seats to choose from.

American said on Thursday it expects third-quarter unit revenue to fall 6.5% from a year earlier, with capacity up as much as 7% from the same period in 2022. American expects third-quarter adjusted earnings of 85 cents to 95 cents a share, in line with expectations.

The company’s forecast includes the cost of labor transactions, such as temporary agreements with pilots. However, the U.S. pilots union is looking to improve its tentative contract after striking a deal that was not yet a rival. Unity and its pilots union last week.

“In terms of wages, we’re going to match those wages,” American Airlines CEO Robert Isom told CNBC’s Phil LeBeau on Thursday. “I want our pilots to know that.”

Here’s how American Airlines fared in this contest second quarter Compared with Wall Street expectations, according to the average analyst estimate compiled by Refinitiv:

  • Adjusted earnings per share: $1.92 vs expected $1.59
  • Total revenue: $14.06 billion vs. $13.74 billion expected

American reported second-quarter net income of $1.34 billion, or $1.88 a share, up from $476 million, or 68 cents a share, a year earlier. Adjusting for one-time items, which include costs related to decommissioning aircraft early in the pandemic, the company earned $1.37 billion, or $1.92 a share.

The record $14.06 billion in revenue beat analysts’ expectations and was up 4.7 percent from a year earlier.

The airline’s flight capacity was up 5.3% from a year earlier.