American Airlines Raises Q2 Profit Guidance Citing Stronger Demand

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• American Airlines Group Inc AAL updated its financial and operational guidance for 2Q23.
• AAL now expects Adjusted EPS of $1.45-$1.65 (prior view of $1.20-$1.40) versus consensus of $1.31.
• It expects an adjusted operating margin of ~12.5%-14.5%, compared to the prior expectation of ~ 11%-13%.
• TRASM is now expected to be between -1% to -3%, compared to prior ~ -2% to -4%.
• Also Read: American Airlines Claims No Earnings Impact From Northeast Alliance Verdict: Report
• The company stated that the improvement in unit revenue versus prior guidance is driven by continued strength in the demand environment. AAL now expects to pay an average of between $2.55 to $2.65 per gallon of jet fuel in Q2 (prior $2.65 to $2.75).
• There was no change in guidance for Q2 Available seat miles of ~ +3.5% to +5.5% YoY, and CASM-ex of ~ +3.5% to +5.5%.
• The airline reported first-quarter FY23 operating revenue growth of 37% year-over-year to $12.19 billion and adjusted EPS of $0.05.
• The company reported no change to the FY23 Adjusted EPS outlook of ~ $2.50 to $3.50 versus the consensus of $2.78.
• Price Action: AAL shares are trading higher by 0.79% at $14.73 on the last check Wednesday.