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Home / Business / American Airlines cuts its earnings forecast for 2018 due to higher fuel costs

American Airlines cuts its earnings forecast for 2018 due to higher fuel costs



American Airlines posted lower earnings in the second quarter and reduced its earnings outlook for 2018 after fuel costs rose in the "most challenging quarter" five years ago after mergers with US Airways CEO Doug Parker] div> div.group> p: first-child "/>

American, the world's largest airline in the traffic, and its rivals hit a fuel surplus of more than 50 percent last year, which reduces their profits. American expects to share earnings between $ 4.50 and $ 5 per share in 2018, according to an earlier full-year estimate of between $ 5 and $ 6 forecast in April.

The airline said it planned to delay some aircraft deliveries and slow down its growth in the second half of the year to cut costs. The American stock fell by almost 27 percent in 201

8, more than its closest rivals.

Strong demand for travel helped drive sales up almost 4 percent year-on-year to $ 11.64 billion, slightly below Wall Street expectations of $ 11.7 billion. American lowered its sales forecast for the three months that ended in June this month, leading the weakness of the domestic market. Net income declined more than 34 percent year-on-year to $ 566 million, or $ 1.22 per share.

Adjusted for one-off items, the airline scored $ 1.63 a share, more than Thomson Reuters' $ 1.59 expected

Like other airlines, America faces strong demand for travel but with higher costs to refuel its aircraft. It said its fuel bill in the quarter rose more than 41 percent. Another challenge this quarter was a computer problem at PSA Airlines, a regional subsidiary of American, which led to the cancellation of more than 2,000 flights in June.

American shortens its growth plan for the second half of the year after rising costs A move widely anticipated by analysts. In the third quarter, the capacity, or the number of seats and the distance they fly, will decrease by 3.3 percent and 1.6 percent in the fourth quarter by 1 percentage point from the previous growth estimate.

American Delays Delivery of 22 Airbus Air321neo aircraft scheduled to be operational by 2021 next year is expected to reduce aircraft investment by $ 1.2 billion in the next three years

The airline Also changes their no-frills basic product these passengers are to bring a hand luggage bag on board from September.

Airline executives have scheduled an appointment with analysts at 8:30 am EDT.

Correction: American net income for the second quarter was $ 566 million. A previous version of this story wrong the number.


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