(New York) American Airlines announced Thursday a net loss of $545 million in the third quarter, weighed down by an exceptional charge of nearly a billion dollars linked to the new salary agreement concluded with its pilots.
Excluding one-off items, it posted a net profit of $263 million. Reported per share – benchmark for the markets – it comes out to 38 cents and exceeds the consensus which was counting on 25 cents.
Revenue between July and September remained completely stable (0.1%) at $13.48 billion (consensus: $13.51 billion).
A record for a third quarter, AA said in a press release, explaining that it had benefited from resilient demand and record revenues generated by its loyalty program.
“We had a great summer,” commented Robert Isom, boss of the group, during an audio conference, rejoicing at having achieved earnings per share “above the range of our forecasts”.
The group’s managers were particularly optimistic about activity in the coming months with reservations in the second half “corresponding to our expectations”, marked by “really strong” long-haul flights in all regions.
According to them, the company – which operated 515,000 flights in the third quarter – still has 5% of capacity available with its current aircraft.
To compensate for the delay in the delivery of new single-aisle aircraft, American has purchased ten Airbus A321neos from its compatriot Alaska Airlines which are expected to join its fleet in late 2023–early 2024.
As its fleet is “young”, the company does not foresee any retirement of aircraft in the next decade.
Based on the trend in fuel prices and demand, and excluding one-off items, the company expects an adjusted operating margin of between 2% and 4% in the fourth quarter and “around 7%” for the the entire current financial year. It was 5.4% in the third quarter.
Chief Financial Officer Devon May added during the audio conference to expect adjusted net earnings per share of between $2.25 and $2.50 for the financial year, emphasizing the “sharp rise” in fuels in recent months.
“With a significant loss in the third quarter, American went against the tide of its rivals who reaped comfortable profits,” Neil Saunders of GlobalData commented to AFP, recognizing that the new collective agreement had created a gap but that the “disappointing” “extremely flat” turnover didn’t help much.
In August, the company’s 15,000 pilots ratified the new four-year collective agreement negotiated with management.
It provides for the equivalent of $9 billion in the form of new compensation and benefits, American Airlines then indicated, which consequently incurred an exceptional charge of $983 million in the third quarter.
The group is currently negotiating these same renewals of collective agreements with its on-board staff and agents.
Around 11:30 a.m. (Eastern time), American Airlines shares rose 4.06% to $11.82 on the New York Stock Exchange.