American Air Climbs on Improved Forecast for Key Revenue Measureby
American Airlines Group Inc. advanced after the carrier said a key financial measure would fall by less than expected, boosted by higher fares.
Revenue from each seat flown a mile will slide 3 percent to 5 percent this quarter from a year earlier, the airline said in a statement Tuesday. The previous forecast was for a decline of 3.5 percent to 5.5 percent.
Investors have closely monitored that revenue measure amid concern that the airline industry’s supply of flights and seats was exceeding demand and driving down fares. Carriers tumbled on Aug. 2 after Delta Air Lines Inc. said so-called unit revenue fell 7 percent in July because of excess seats on trans-Atlantic flights, low prices on tickets booked just before travel and bad bets on currency exchange.
American, which provided its earlier forecast during a July 22 conference call, credited the change in outlook to improving yields, or average fare per mile. The carrier reaffirmed its expectation for pretax margin excluding special items to range between 12 percent and 14 percent in the third quarter.
The airline rose 2.8 percent to $35.30 at 9:42 a.m. in New York. Shares fell 19 percent this year through Monday.