American Airlines beat the profit expectations on solid travel demands

American Airlines beat the profit expectations on solid travel demands


American Airlines announced its fourth-quarter results on last Thursday that beat the analyst expectation by a narrow margin.

In the midst of fuel prices raising high, a strong travel demand set off the effect and contributed towards the positive results.

The other-than-booking sales including corporate travelers remained strong while partial government shutdown came out hurting bookings, said the airline’s executives. But to the effects caused of the shutdown, the American Airline did not put any dollar amount in its financial report, like other Airlines including Southwest Airlines and Delta Air Lines did.

After the shutdown which started Dec 22, Transportation Security Administration (TSA) has been facing more screeners getting sick and working with less than before-shutdown staff is also making the air travel less safer, as saying some of the air traffic controllers. Moreover the controllers and screeners are not being paid and the last Friday they missed their biweekly paycheck for the second time since shutdown started.

To the viewpoint that security at the airports is being compromised amid shutdown, the Chairman and CEO Doug Parker eliminated chance of that to be happening and added that the screening is being carried out as usual and up to the defined parameters, but what actually is happening is that for the screening, passenger have to go through long lines at TSA now.

American Airlines earned a fourth-quarter profit of $319 million which not only remained slightly higher than the analyst’s expectations but also significant against the loss of $583 million the company faced in the same quarter a year ago.

Excluding items, profit remained $1.04 per share for which analysts were estimating a figure of $1.02 per share.

The higher travel demands raised the fourth-quarter revenue by 3 percent to $10.94 billion against analysts’ expectations of $11.01 billion, whereas expenses also rose by 4 percent largely because of the high fuel prices.

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Javier Davis produces news on stocks, currencies, bonds, commodities, and real estate. His in-depth research covers most of the major financial markets in America, Europe, and Asia. His research is based on the interconnected relationships among economic and technical factors that drive valuations in the markets, with an emphasis on how to formulate investment strategies. From interest rates to inflation to economic growth and much more, the fundamental concepts presented on this website provide an essential foundation of knowledge for investors to profit in stocks, bonds, commodities, currencies, and real estate markets.