American Airlines is now expecting higher third-quarter revenues than it previously predicted, despite a reduction in flights. The U.S. airline has cut its flights by around 10% but has achieved more money per mile flown – by around 25% – resulting in higher Q3 earnings. Although costs per seat were also higher, by around 14% on 2019 levels.
During the summer months, American Airlines saw a dramatic rise in the demand for flights as it returned to pre-pandemic levels. Although, like several other airlines worldwide, it battled with balancing the rising consumer demand with pandemic disruptions to its business, leading to passenger caps and a reduced flight schedule.
However, the increase in demand allowed American to charge higher fares for their flights over the summer. Most of its business is currently coming from leisure travel, with expectations for business travel to pick up in 2023.
American Airlines now predicts Q3 revenues of $13.46 billion, an increase of 13% on the same pre-pandemic quarter in 2019. It previously estimated its revenue would be up by between 10% and 12% on 2019 levels.
The airline’s shares rose by 4.1% following the announcement, to $12.55, which had a spillover effect on other airline shares, which also rose. Several other airlines’ Q3 results are expected to follow within the coming weeks.