American Airlines Group Inc. on Thursday posted its first quarterly profit without U.S. government aid since the COVID-19 pandemic began as strong summer travel demand generated the highest quarterly revenue in its history.
The Texas-based carrier, however, expects cost pressure to remain elevated in the current quarter as the airline industry grapples with operating expenses like higher fuel and labor costs.
The lifting of coronavirus curbs and bottled-up travel demand have sparked the strongest summer for U.S. carriers in three years, putting most of them on track for a profitable quarter.
But staffing gaps and aircraft shortages have made it tougher to ramp up capacity and fully tap booming demand. In fact, carriers have been forced to cut flights and make costly staffing adjustments to avoid cancellations and delays, driving up operating costs.
American plans to keep its capacity at least 8% below the pre-pandemic level in the quarter through September even as it expects travel demand to stay strong.
“As we look to the rest of the year, we have taken proactive steps to build additional buffer into our schedule and will continue to limit capacity to the resources we have and the operating conditions we face,” Chief Executive Robert Isom said in a staff memo.
American’s shares were down 3% at $14.75 in pre-market trade.
The company reported an adjusted profit of 76 cents a share for the quarter through June in line with analysts’ expectations. It generated $13.42 billion in revenue, topping Wall Street estimates.
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