American Airlines profits down on storms, higher costs

American Airlines profits down on storms, higher costs

NEW YORK: American Airlines reported higher sales but lower third-quarter profits on Thursday (Oct 26) due to increased costs and the hit from US hurricanes that forced more than 8,000 flight cancellations.

Earnings for the quarter ending Sep 30 were US$624 million, down 15.3 per cent from the year-ago period. Revenues rose 2.7 per cent to US$10.9 billion.

While revenues rose for both passengers and cargo, higher fuel expenses and a boost in employee salaries dragged on results.

American also cited Hurricanes Harvey, Irma and Maria, which cancelled flights and caused the company to cap fares for customers in the storm-affected region. The storms reduced pre-tax earnings by about US$75 million.

"Despite the significant operational challenges posed by three hurricanes, our team delivered solid financial results," said chief executive Doug Parker.

"The hurricane response highlighted the humanity and professionalism of the American team, and our industry as a whole."

American projected a 2.5 to 4.0 per cent rise in the fourth quarter in a closely-watched industry benchmark of passenger revenue per available seat miles.

Results translated into US$1.42 per share, excluding one-time costs, two cents above analyst expectations.

Shares rose 1.9 per cent in pre-market trading to US$52.00.

Source: AFP/de

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