(Reuters) – American Airlines on Thursday forecast second-quarter profit above estimates as travel demand stays strong in the face of a looming recession.
Major airlines are riding the strongest travel wave since the start of the COVID-19 pandemic with more people flying despite rising airfare and squeezed budgets owing to high inflation.
The company expects an adjusted profit of $1.20 per share to $1.40 per share for the quarter compared with analysts’ average estimate of $1.04 per share.
Ticket prices have risen due to strong demand as countries ease restrictions and corporate travel resumes, helping airlines mitigate rising costs from increased jet fuel prices and higher labor expenses.
Airlines are looking to cash in on strong summer travel boom, as international travel rebounds at a faster pace compared with domestic travel.
The company reported first-quarter net profit of $10 million, or $0.02 per share, compared to a loss of $1.6 billion, or $2.52 per share, a year earlier
Analysts expect a dim economic outlook for 2023, but airline executives have stayed bullish on travel demand.
The Fort Worth, Texas-based carrier’s total operating revenue rose 37% to $12.19 billion.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Vinay Dwivedi)
