Advertisement
Advertisement

American Airlines sees higher quarterly costs as labor, jet fuel prices soar

By:
Reuters
Updated: Apr 12, 2022, 14:06 UTC

(Reuters) - American Airlines said on Tuesday it expects first-quarter total revenue to be down about 16% compared to pre-pandemic levels, as airlines struggle to meet rising travel demand with limited staffing.

An American Airlines aircraft lands at Reagan National Airport in Arlington, Virginia

(Reuters) -American Airlines expects higher costs in the current quarter amid higher labor and jet fuel expenses.

As demand returns, carriers are shelling out more to attract new staff as well as retain the existing crew amid looming worker shortage. Rising jet fuel prices around the world caused by Ukraine crisis are also impacting these carriers.

American projects a pretax loss, excluding special items, in the range of 21.3% to 22.6% for the first quarter.

The carrier said it expects its CASM (cost per available seat miles) to be up between 12% and 13% versus 11% and 13% predicted last month, excluding costs related to fuel and net special items. Overall CASM is estimated to be at least 16% higher than in the first quarter of 2019.

Shares of American fell about 1% to $16.81 in early trade.

The airline raised its jet fuel expenses for the quarter. It now expects to pay an average of between $2.80 and $2.85 per gallon, higher than its previous estimate of $2.73 and $2.78 per gallon.

Meanwhile, American expects quarterly total revenue to fall about 16% compared to pre-pandemic levels, as inflationary pressures impact consumer demand.

(Reporting by Nathan Gomes and Aishwarya Nair in Bengaluru; Editing by Saumyadeb Chakrabarty and Krishna Chandra Eluri)

About the Author

Reuterscontributor

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV. Learn more about Thomson Reuters products:

Did you find this article useful?

Advertisement