American Airlines Lowers Profit Projections as Fuel Prices Rise
Photo Credit: American Airlines cut its full-year earnings per share guidance on Thursday. Pictured is one of the airline's jets. American Airlines
Skift Take
Look for airline ticket prices to increase if fuel prices don't fall soon. Passengers may not like it, but what other business doesn't try to recoup increased production costs from consumers?
American Airlines cut its estimates for full-year earnings-per-share on Thursday, spooking investment analysts who wondered why the carrier has no plans to sell fewer seats later this year to try to boost pricing power.
That was the theme of American's first quarter earnings call, after the airline slashed its per share earnings guidance by 50 cents. The reason is fuel prices that have increased more than 60 percent since last summer, and by 12 percent just in the past two weeks, CEO Doug Parker said. Oil prices were trading at about $68 per barrel in New York on Thursday. Last June, they were as low as $44.83.
The company expects to pay roughly $2.3 billion more in fuel this year than in 2017, and while some of that is because American is flying more, most of it comes from higher pri
