American Airlines Raises 2023 Profit Forecast

American Airlines released an optimistic earnings outlook for 2023 on Friday, raising its full-year per-share prediction to between $3 and $3.75, in line with Wall Street's expectations. This upbeat revision, reflective of a fruitful peak travel season, aligns the airline with others capitalizing on the continuing surge in travel demand.

Despite this encouraging prospect, American anticipates a downturn in the upcoming quarter. The airline forecasts a potential 6.5% decrease in revenues for the third quarter compared to the previous year, even with a projected capacity growth of up to 7% from the same period in 2022. Earnings per share for the third quarter are predicted to decrease between 85 cents and 95 cents, mirroring market estimates.

American Airlines exceeded Wall Street's expectations in the second quarter with adjusted earnings per share of $1.92 versus the anticipated $1.59, and total revenue of $14.06 billion, surpassing the predicted $13.74 billion.

The company boasted a net income of $1.34 billion, or $1.88 a share for the second quarter, a substantial increase from the $476 million, or 68 cents a share reported in the same period last year. The airline also noted a 5.3% increase in its flying capacity compared to the previous year.

Airline executives, including those from American, remain optimistic about travel demand, particularly for international journeys. Passengers have welcomed a decline in airfares compared to the previous year when airlines were navigating the fallout from the COVID-19 pandemic, resulting in restricted flight schedules and fewer seat options. All told, American Airlines expects a strong full-year 2023 in terms of profit.