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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Economy

Economy

American Airlines cuts 2023 profit forecast on soaring costs

American airlines Photo Credit: DREW ANGERER American airlines Photo Credit: DREW ANGERER
American airlines Photo Credit: DREW ANGERER American airlines Photo Credit: DREW ANGERER

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As it fights to combat the effects of rising jet fuel prices and costly labor contracts, American Airlines (AAL.O) on Thursday lowered its prediction for adjusted profit for the year 2023, which caused its shares to decline by around 1.5% in premarket trade.

In contrast to its prior prediction of $3 to $3.75 per share, the business now anticipates an adjusted profit of $2.25 to $2.50 per share for the year.

Concerns about the sector’s profitability have led to a sell-off in airline stocks and a reduction in analysts’ profit projections due to rising expenses and early indications of reducing domestic travel demand.

After striking a new labor agreement with its pilots that included more than $9.6 billion in total pay and benefit increases over four years, American Airlines had previously warned that third-quarter expenses would climb.

Total revenue per available seat mile (TRASM), a measure of pricing power, is expected to decrease from 5.5% to 7.5% in the fourth quarter compared to last year.

For the third quarter that ended on September 30, it recorded a net loss of $545 million, or 83 cents per share, compared to a profit of $483 million, or 69 cents per share, a year earlier. Total operational revenue for the carrier increased slightly to $13.48 billion.

In conclusion, American Airlines’ dedication to fuel efficiency, sustainability, and technological advancement is not just about competing in the industry but about leading it. They have weathered quarterly challenges through innovative strategies and a forward-thinking approach. As they continue to invest in fuel-efficient aircraft, adopt sustainable practices, and leverage technology, American Airlines is poised for a future where they not only overcome challenges but set the standard for excellence in the aerospace industry.


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