The company upped its revenue projection for the third quarter on Tuesday, which caused American Airlines shares (AAL stock) to surge about 5% in premarket trading ahead of the company’s earnings report scheduled for the following week.
The airline company (NASDAQ:AAL) forecasts that its overall revenue would be approximately 13% higher in the three months leading up to the end of September compared to the same time in 2019. In the last projection that it provided in July, it anticipated that revenue would be 10% to 12% higher than the levels of 2019.
It is projected that revenue per available seat mile, a metric that is used to assess the efficiency of airlines, would be 25% higher than 2019 levels. This is ahead of the company’s earlier projection, which was for an increase of 20% to 24%.
On the other hand, expenses per available seat mile are projected to increase by 14%, which is at the upper end of the projection range provided by the firm.
AAL Stock Price
The share price, which has decreased by 33% so far in 2018, increased by 4.7% to $12.62 in the premarket trade that took place early on Tuesday. A positive mood was swept over the industry in advance of earnings season as a result of the report. Delta Air Lines DAL –1.85% (DAL) and United Airlines (UAL) both increased their share prices by close to 3%, and Southwest Airlines LUV –1.01% (LUV) increased theirs by almost 2%.
United Airlines increased its revenue forecast for the third quarter of this year last month, citing ongoing high demand following a “solid summer.” United anticipates that its overall operating revenue will increase by around 12% compared to 2019 levels, a growth that is comparable to American’s updated prediction.
Southwest Airlines has revised its revenue projection for 2020 to be between 9% and 11% higher than in 2019, down from an earlier outlook of between 8% and 12% higher than in 2019. The airline said that demand for leisure travel remained high, while commercial income lingered well below the levels seen in 2019.
However, American Airlines recorded a large increase in business travel during the first few weeks of September.
On Thursday, Delta will be the first of the major carriers to report earnings, and investors will be looking to see how much business travel and international travel are picking up. These are two areas that haven’t recovered as quickly as the rest of the travel industry. Delta will be the first of the major carriers to report earnings.
Featured Image- Megapixl @ Pavel0887
Author Valerie Remorosa 
