The American Airlines company’s Boeing 787-9 Dreamliner taking off from Barcelona airport in Barcelona on 24th February 2023.JanValls | Nurphoto | Getty ImagesAmerican Airlines’ performance in the fourth quarter of 2023 was compared to Wall Street estimates compiled by LSEG, formerly known as Refinitiv. The company’s earnings per share was reported at 29 cents, adjusted, compared to the expected 10 cents per share. The revenue was $13.06 billion, slightly higher than the expected $13.02 billion.
During the last three months of 2023, American Airlines recorded a net income of $19 million, which was a significant decrease of nearly 98% from the $803 million reported in the previous year. The earnings per share also saw a decline, dropping to 3 cents from $1.14 in the fourth quarter of 2022. However, with adjustments for one-time items, including the impact of a new labor agreement with the airline’s pilots, American earned 29 cents per share.
In the third-quarter earnings report, the airline had predicted it would break even for the December period. CEO Robert Isom expressed satisfaction with the results and stated, “At American, we’re focused on reliability, profitability and really strengthening our balance sheet. We’ve done all of those… I think that we’re going to have a really busy first and second quarter, and I think the time to buy is right now for travel. It’s going to be a busy year.”
Looking ahead, American projected a net loss per share of between 15 cents and 35 cents, adjusted, for the first quarter of 2024. Costs, excluding fuel, are expected to rise between 2% and 4% for the period, with flying capacity increasing between 6.5% and 8.5%.
For the full year 2024, American anticipates adjusted earnings per share of $2.25 to $3.25 with flying capacity up mid-single digits over 2023. In a letter to American team members, Isom announced that all U.S. and Canada-based employees will receive a profit-sharing payment in March.
This earnings report coincides with a busy day for the airline industry, as both Southwest and Alaska also issued their fourth-quarter earnings on Thursday. United Airlines, on Monday, reported higher-than-expected earnings and revenue along with a positive outlook for 2024.
American Airlines achieved its best-ever on-time departures over the December holidays, despite the challenging winter weather in the early weeks of January. The focus on the Boeing 737 Max 9 plane remains, with the aircraft model grounded by the Federal Aviation Administration following an Alaska Airlines midflight incident. American doesn’t have any of the planes in its fleet, but it does have the more common 737 Max 8, with 20 more planned for this year, according to Isom. However, the FAA recently announced a halt to Boeing’s ability to increase 737 Max production, which could impact future aircraft deliveries.
Isom emphasized the importance of a safety management system and the collaboration of all partners in producing a quality product, saying, “We have a safety management system that we worked on with the FAA, and in that, we try to identify anything that may be an issue or cause for further investigation – and that even holds true when it comes to taking aircraft deliveries.”
