American Airlines profit beats estimates on lower fuel costs

American Airlines profit beats estimates on lower fuel costs

FILE PHOTO: An American Airlines jet takes off from Washington National Airport in Washington
FILE PHOTO: An American Airlines jet takes off from Washington National Airport in Washington, U.S., August 9, 2017. REUTERS/Joshua Roberts/File Photo

FORT WORTH, Texas: American Airlines Group Inc beat Wall Street estimates for third quarter profit on Thursday (Oct 24) as lower fuel costs boosted margins, but it raised its 2019 cost estimates related to the Boeing 737 MAX grounding to US$540 million.

The US airline, which has extended cancellations of 737 MAX flights through Jan 15, had previously said its 2019 pre-tax income would take a US$400 million hit because of flight cancellations.

The 737 MAX was grounded worldwide in March after two deadly crashes together killed 346 people within five months.

In the latest quarter, American said it took a US$140 million hit to its pre-tax income from the ongoing grounding.

The US airline also cut the top end of its 2019 adjusted profit forecast to US$5.50 per share. The company had previously forecast a range of US$4.50 to US$6 per share.

American said net income rose to US$425 million, or 96 cents per share, in the third quarter ended Sep 30 from US$372 million, or 81 cents per share, a year earlier.

Total operating revenue rose 3 per cent to US$11.91 billion.

Excluding items, American earned US$1.42 per share, above the average analyst estimate of US$1.40 per share, according to IBES data from Refinitiv.

Source: Reuters/nc

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