American Air sees higher revenue, expenses in second quarter

American Airlines Group Inc. expects revenue to balloon well above its original expectations this quarter as consumers swarm back to travel following the pandemic, helping the carrier absorb the impact of higher jet-fuel prices and other expenses.

Total revenue will jump by as much as 13% over the same period of 2019, the Fort Worth, Texas-based airline said in a regulatory filing Friday ahead of an industry conference. That compares with the carrier’s original outlook for an increase of 6% to 8%. 

American joined a parade of US carriers touting more robust revenue forecasts as domestic demand returns to or, in some cases, swells beyond the record passenger traffic year of 2019. Airlines believe the summer season could be the start of sustained profits for the first time since coronavirus began devastating airline travel in early 2020. Industry flight capacity remains below three years ago, allowing carriers to boost fares to help offset higher fuel prices.

“The economy has grown for the last three years. The airlines have not participated in any of that growth,” American Chief Executive Officer Robert Isom said Friday at an industry conference. “We’re now just getting back as an industry to” near 2019 levels.

American’s shares fell 4.2% at 9:36 a.m. in New York as the broader market slumped. The stock slipped 2.8% this year through Thursday’s close, better than the performance of the S&P 500.

Delta Air Lines Inc., United Airlines Holdings Inc., Southwest Airlines Co. and JetBlue Airways Group Inc. all recently strengthened their second-quarter revenue projections. American’s unit revenue, or sales for each seat mile flown, will climb as much as 22%, the carrier said, compared with an earlier outlook for an increase of 14% to 16% above 2019.

American’s flying capacity will remain as much as 8% below 2019, the high end of an existing forecast. Unit costs excluding fuel will climb as much as 11%. The prior outlook was for an increase of 8% to 10%.