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American Airlines (AAL) 2Q 22 earnings

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American Airlines posted its first quarterly profit because the Covid pandemic began without government aid but joined competitors in scaling back growth plans after a number of disruptions this 12 months. The carrier on Thursday forecast a third-quarter profit, nonetheless, one other sign of strong travel demand, even at high prices.

American posted a second-quarter profit of $476 million, up from $19 million a 12 months earlier, though the airline was still benefiting from federal coronavirus payroll support last 12 months.

Second-quarter revenue of $13.4 billion was up 12% from before the pandemic, although American flew 8.5% lower than the identical period of 2019, the airline said.

American has been more aggressive than rivals United Airlines and Delta Air Lines in restoring capability, but American’s CEO said the carrier would limit its expansion this 12 months.

“As we glance to the remainder of the 12 months, we’ve got taken proactive steps to construct additional buffer into our schedule and can proceed to limit capability to the resources we’ve got and the operating conditions we face,” CEO Robert Isom said in a note to staff.

The airline said it could fly 8% to 10% below 2019 levels within the third quarter but said revenue can be up as much as 12% from three years earlier as high fares proceed into the summer.

Here’s how the carrier performed within the second quarter, compared with Wall Street expectations in line with Refinitiv consensus estimates:

  • Adjusted earnings per share: 76 cents versus an expected 76 cents.
  • Total revenue: $13.42 billion versus expected $13.40 billion.

Unit costs surged 45% within the second quarter from 2021 because the airline, like its rivals, faced a jump in fuel and other expenses.

Alaska Airlines posted net income of  $139 million on record revenue of nearly $2.7 billion when it reported its own second-quarter results Thursday. It also said it could be cautious on build up capability.

“As is the case for your entire economy, supply chains remain disrupted by the pandemic,” CEO Ben Minicucci said on an earnings call after the report. “We’re working with key partners closer than ever before and might be more conservative in planning our operation and capability until we see higher levels of stability and predictability.”

For the third quarter Alaska plans to fly a schedule down 5% to eight% compared with the identical period of 2019 and expects revenue up as much as 19% over three years earlier.

United late Wednesday reported its first profit because the pandemic without the assistance of presidency aid, but said it could cut its growth plans through 2023.

American shares fell 7.4% on Thursday, United lost 10.2% and Alaska fell 0.5%, while the S&P 500 ended nearly 1% higher.

Correction: This story has been updated to reflect that American Airline’s second-quarter unit costs surged 45% over 2021. An earlier version misstated the comparison period.

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