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Updated March 12, 2024, 4:44 PM EDT
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Shares of American Airlines fell nearly 5% on Tuesday after the airline said its adjusted loss for the first quarter of this year would be at the lower end of its prior expectations due to higher-than-expected fuel prices.
important facts
American Airlines said in an SEC filing that it now expects to pay an average of $2.80 to $2.90 per gallon of fuel, compared to an expected average of $2.65 to $2.85 this quarter.
As a result of higher fuel prices, American Airlines expects its adjusted loss per diluted share to be between $0.15 and $0.35, at the low end of its guidance range.
The company said it does not expect higher fuel prices to impact its full-year earnings outlook.
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4.7%. That’s how much American stocks fell from Tuesday’s market open to market close. As of 4 p.m. ET, the stock was trading at $13.96 per share, down from $14.19 at the start of the day.
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Southwest Airlines stock also fell sharply on Tuesday, but it wasn’t because of jet fuel prices. Southwest Airlines announced it would reduce its flying capacity after receiving fewer Boeing planes than expected. By the close of trading Tuesday, Southwest Airlines stock had fallen more than 15% to a low of $28.56, marking the company’s worst day since the coronavirus pandemic hit the airline four years ago. It became.
Main background
The average cost of jet fuel domestically in January was $2.71 per gallon, according to the Department of Transportation. While this price is down from the high jet fuel costs seen in mid-2022, it is still far above what it was in January 2019, before the coronavirus pandemic. Southwest Airlines raised its fourth-quarter fuel cost forecast in December, and Delta Air Lines increased its spending. MarketWatch reported that fuel costs in the fourth quarter were higher than expected. American Airlines ended last year with record full-year revenue of about $53 billion, and its fourth-quarter and full-year completion rates were the highest since 2013. American Airlines announced earlier this month that it had ordered 85 Boeing 737-10s. According to CNBC, Boeing is aiming to expand premium seats and modernize its fleet as part of its 2024 revenue strategy, sparking recent controversy over aircraft safety. Other airlines have not publicly announced the cost of jet fuel that will affect their operations, but
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