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Third-quarter consolidated operating costs per available seat mile (CASM: excluding fuel and net special items) are now anticipated to be at the better end of AAL’s prior guidance range unveiled on Aug 22, 2023.

AAL now anticipates third-quarter 2023 earnings in the range of $0.20-$0.30 per share (prior view: $0.85-$0.95).The Zacks Consensus Estimate for the same is currently pegged at 75 cents per share. Notably, this retroactive pay expense is expected to weigh on third-quarter adjusted operating margin by almost 1.7 points and adjusted earnings per diluted share by $0.23.Īdjusted operating margin is now anticipated in the range of 4%-5% (prior view: 8-10%). This retroactive pay expense is a result of the ratification of the new labor deal (for wage increase) with the pilots represented by the Allied Pilots Association, which is to be recognized in the third quarter of 2023. With fuel expenses being a significant input cost for the aviation space, the uptick in oil prices does not bode well for airlines.Īpart from rising fuel expenses, AAL is also burdened with the retroactive pay expense of almost $230 million.

The downside was due to the unfavorable guidance provided by AAL for the third quarter of 2023, owing to high fuel and labor expenses.įor third-quarter 2023, American Airlines now anticipates average fuel cost per gallon in the band of $2.90-$3.00 (prior view: $2.55-$2.65). The share price depreciation resulted in the AAL stock ending the trading session at $13.31. Shares of American Airlines (AAL ) declined 5.67% on Sep 13 from Sep 12’s closing price.