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American Airlines reports Q2 loss but exceeds estimated forecast

American Airlines, one of the largest airlines in the United States, reported a loss in the second quarter of this year. However, despite the loss, the company’s forecast for the current period exceeded analysts’ estimates, indicating a positive outlook for the future.

In the second quarter, American Airlines expects to earn between $1.15 and $1.45 per share on an adjusted basis, surpassing the average estimate of $1.18 compiled by analysts. For the full year, the company reiterated its forecast to earn between $2.25 and $3.25 per share.

CEO Robert Isom expressed confidence in the company’s ability to meet its financial targets for the year, stating, “While we aren’t satisfied with our first-quarter financial results, we have a strong foundation in place, and we remain on track to deliver on our full-year financial targets.”

American Airlines also provided insights into its operations for the second quarter. The company expects its capacity to increase by 7% to 9%, while unit revenues are projected to decline by 1% to 3% compared to last year.

Similar to other major airlines such as Southwest, United, and Alaska, American Airlines has been affected by Boeing’s recent quality control and safety crises. Isom mentioned that American will receive seven fewer aircraft from Boeing than previously anticipated. However, he does not expect a significant impact from these delays.

Isom conveyed his frustration with Boeing’s performance, stating, “My message is Boeing hasn’t changed since the last time we talked. Get your act together. Deliver.”

Analyzing American Airlines’ performance in the first quarter, the company reported a loss of $312 million, or 48 cents per share. This is in contrast to a profit of $10 million, or 2 cents per share, during the same period last year. After adjusting for one-time items, including costs associated with new labor contracts, American Airlines reported a loss of $226 million, or 34 cents per share.

Operating expenses for the airline rose by nearly 7%, with salaries and related costs experiencing an 18% increase. Despite the loss, American Airlines saw a 3.1% rise in revenue, reaching $12.57 billion.

Overall, American Airlines’ second-quarter forecast exceeding analysts’ estimates suggests that the company is on track to recover from its first-quarter loss. With a strong foundation in place and a focus on meeting financial targets, American Airlines remains optimistic about its performance for the rest of the year. However, challenges such as Boeing’s ongoing issues continue to pose potential obstacles for the company’s operations.

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