American Airlines Reported High Q2 Financial Data

On Thursday, shares of American Airlines fell as it announced its robust second-quarter results, lifting its full-year profit estimates.

Its stock price went down by -6.24% to $17.44 per share on July 20. Likewise, it is expected to decline by -0.17% to $17.41 apiece in the upcoming session.

The company’s earnings per share increased to $1.92, higher than experts’ $1.56 forecast. Also, it is better than the previous $0.05 figures.

Moreover, the revenue of American Airlines jumped to $14.10 billion, surpassing the $13.72 billion consensus. It topped the prior $12.20 billion data.

Investors were disappointed with its outlook for the year’s second half despite the company posting better-than-expected quarterly earnings.

According to analysts, shareholders were concerned about why the airline did not raise its full-year guidance following continuous earnings beats.

In addition, they have doubts about a potential increase in non-fuel costs of American Airlines after pilot contract negotiations.

CEO Robert Isom stated they will have similar pay rates to a rival who offers a new deal to pilots. As a result, it would likely increase the agreement’s value, which is currently priced at over $8.00 billion.

The revenue forecast of American Airlines showed their ticket prices for domestic travel climaxes. It added worries about its ability to balance cost pressure.

Pilot Deal of American Airlines at Risk

A contract between American Airlines and the union representing its pilot is said to be threatened. It came after the deal between United Airlines and the union raised the agreement’s bar.

According to a report, the proposed contract seemed less critical after agreeing to the deal with the rival airline. United’s arrangement increased pilots’ wages by 40.00% within four years with benefit enhancements and more improvements.

Analysts said United’s contract could lead to a 2.00% pay gap between the pilot groups. Also, it allowed for more days off for junior pilots and extended sick time compared to American Airlines.

Additionally, it claimed to continue working with the APA to approve the agreement. They assured me that they would take care of their pilots.