American Airlines Forecast Profitable 2Q As Travel Demand Soars

On Thursday, this week, American Airlines forecast strong strong-quarter pretax profit in its latest report.  The data suggests, then, solid travel demand will be able to bolster some of the hardship brought on by excessive fuel costs and other quickly soaring expenses.

As the largest airline that serves the United States, everyone will be looking to American Airlines as an example of what may be to come as the pandemic continues to complicate business-as-usual. Fortunately, American announced that March was the first month they saw revenue surpass that of 2019, since the beginning of the pandemic.  And, fortunately for them—and, quite possibly, the industry as a whole—bookings continue to rise.

The passenger air carrier announced that second-quarter sales could reach as much as 8 percent higher than the same period from just three years ago.  And this is in spite of the fact that the plan to schedule up to 8 percent fewer flights than the same three-month period from 2019.  Of course, these numbers are still notably better than those of American Airline’s closest competitors: Delta Airlines and United Airlines.  The latter two appear to have been slightly more conservative in their plan to fully restore maximum capacity travel over the course of the pandemic.

Apparently, American Airlines forecasts that business travel will make have recovered by roughly 90 percent since the second quarter of 2019.  And most of this travel will probably be led by smaller and mid-sized companies.

All that in mind, however, American Airlines is the third major carrier to report their quarterly results, so far, this month.  We can expect to hear results from United Airlines soon, as they announced on Wednesday that they anticipate a profitable year as well.  Delta echoes the sentiment.

Overall, domestic air travel in the US grew by 20 percent since March of 2019.  On top of that, bookings also rose by 12 percent.  The most recent data does suggest that demand is slightly down—down by 1 and 2 percent in March and April, respectively—so the revenue bump is certain good news.