American Airlines has Raised its Earnings Outlook for 2023

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American Airlines has raised its earnings outlook for 2023 due to a strong start to the peak travel season, benefiting from the continued surge in demand. Despite this positive outlook, the airline expects its unit revenues to drop by up to 6.5% in the third quarter compared to the same period in 2022, with capacity growth of up to 7%.

For the full year, American Airlines projects adjusted earnings of $3 to $3.75 per share, up from a previous forecast of $2.50 to $3.50. This updated guidance aligns with Wall Street expectations of $3.10 per share.

American Airlines’ upbeat outlook is in line with other airlines that have experienced a surge in travel demand, especially for international trips. Some airfares have decreased compared to the previous year when airlines faced challenges in rebuilding schedules after the worst of the COVID-19 pandemic.

In the second quarter, American Airlines reported adjusted earnings per share of $1.92, surpassing the expected $1.59, and total revenue of $14.06 billion, which beat the anticipated $13.74 billion. The company’s net income for the quarter was $1.34 billion, significantly higher than the $476 million in the same period last year.

The airline’s flying capacity has increased by 5.3% from a year ago, reflecting the growing demand for air travel. Despite the positive news, American Airlines’ shares dropped more than 6% on the day of the announcement, potentially due to market reactions or other factors.