American Airlines lowers 2nd quarter outlook – 05/29/2024 at 10:34


(AOF) – American Airlines is expected to fall in pre-market trading on Wall Street after having revised its outlook for the second quarter downwards. The American airline expects adjusted earnings per diluted share of between $1.00 and $1.15, compared to $1.15 and $1.45 per share previously. Total revenue per available seat mile (RASM) will be down approximately 5-6%, compared to 1-3% previously forecast. The adjusted operating margin is anticipated between 8.5% and 10.5% compared to 9.5% to 11.5% previously.

American Airlines also announces the departure in June 2024 of its commercial director since 2022, Vasu Raja, who joined the company in 2004.

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Results weakened again for European companies

While fuel represents up to 35% of their costs, professionals estimate that European airlines are not expected to return to profit before 2023 or 2024 at the earliest. These players predict that energy prices would remain high at least until 2023. The International Air Transport Association (IATA) announced a forecast of cumulative losses of $9.7 billion in 2022 for airlines to across the world we will still have to wait until 2023 to see a return to profits on a global scale, particularly due to the surge in oil costs and the increase in labor costs. Positive point: travel demand seems to be resisting the uncertainties caused by the international economic and political situation. However, uncertainties regarding Covid, the war in Ukraine, as well as rising prices are increasing last-minute reservations. According to Iata, only 8% of international reservations made at the end of May went beyond September.

The social climate is deteriorating in low-cost airlines

These companies are benefiting from a very strong recovery. They had already managed to monopolize 40% of air traffic in 2021, this proportion could even rise to 50% this year. However, strike movements have affected the activity of Volotea, EasyJet and Ryanair, with confrontations over pay and working conditions. Generally speaking, the sector is facing a shortage of personnel. After having severely cut their workforce in 2020 and 2021, companies and airports must urgently recruit to support the resumption of activity.



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