{"id":11205,"date":"2023-09-13T14:02:10","date_gmt":"2023-09-13T14:02:10","guid":{"rendered":"https:\/\/prosfunds.com\/business\/american-airlines-makes-a-drastic-cut-to-profit-forecast-as-fuel-prices-soar\/"},"modified":"2023-09-13T14:02:12","modified_gmt":"2023-09-13T14:02:12","slug":"american-airlines-makes-a-drastic-cut-to-profit-forecast-as-fuel-prices-soar","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=11205","title":{"rendered":"American Airlines makes a drastic cut to profit forecast as fuel prices soar"},"content":{"rendered":"
\n

\n American Airlines said that rising costs, including fuel, will dent its upcoming profits.\n <\/p>\n

\n The Forth Worth-based carrier said in a regulatory filing that its adjusted earnings per share will now be between 20 cents to 30 cents in the third quarter, which is drastically smaller than the 95 cents a share the airline was previously forecasting.\n <\/p>\n

\n American said that fuel prices have \u201cincreased considerably\u201d since July, when it issued its initial third-quarter guidance. The airline is paying about $3 per gallon for jet fuel. Oil prices surged 9.1% last month, according to the Labor Department\u2019s Consumer Price Index report that came out Wednesday.\n <\/p>\n

\n Another reason for the smaller profit is the new pilot contract. Earlier this summer, the airline inked a new deal with its pilots with about $9 billion dollars in incremental compensation and benefits.\n <\/p>\n

\n Also on Wednesday, discount carrier Spirit cut third quarter revenue by 5% from its previous forecast. It blamed rising fuel prices and \u201cheightened promotional activity with steep discounting for travel booked\u201d for the weeks leading into Thanksgiving weekend for the adjusted guidance.\n <\/p>\n

\n Shares of American (AAL) and Spirit (SAVE) fell about 3% in premarket trading.\n <\/p>\n

\n Global airlines should make nearly $10 billion in profit this year as business bounces back from the pandemic, according to a recent forecast from the International Air Transport Association. The organization said in June that it more than doubled its 2023 profit forecast for the global airline industry despite a looming economic downturn.\n <\/p>\n

\n Airlines are expected to make $9.8 billion in net profit in 2023, up from a December forecast of $4.7 billion.\n <\/p>\n

\n United Airlines CEO Scott Kirby previously told CNN that he expected the carrier to return to 2019 levels of profitability this year. The airline was holding a lot more cash on its balance sheet, however, to withstand a potential economic downturn in the near term.\n <\/p>\n

\n \u201cWe\u2019ve dramatically improved our relative and absolute profit margins and we\u2019re starting to pay down debt and that gives us the firepower to really ride through a short term recession,\u201d Kirby said.\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

American Airlines said that rising costs, including fuel, will dent its upcoming profits. The Forth Worth-based carrier said in a regulatory filing that its adjusted earnings per share will now be between 20 cents to 30 cents in the third quarter, which is drastically smaller than the 95 cents a share the airline was previously […]<\/p>\n","protected":false},"author":1,"featured_media":11206,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-11205","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\nAmerican Airlines makes a drastic cut to profit forecast as fuel prices soar | Prosfunds<\/title>\n<meta name=\"description\" content=\"American Airlines said that rising costs, including fuel, will dent its upcoming profits. 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