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American Airlines downgrades third quarter guidance as Hurricane Irma takes its toll

August was a record month ... then along came Hurricane Irma
Miami
Calm before the storm

American Airlines Group Inc (NASDAQ:AAL) reported record August traffic figures, but Hurricane Irma has forced it to downgrade third quarter guidance.

The airline's total revenue passenger miles (RPMs) rose to a record 21.2bn for the month of August, which was a 3.7% increase on August 2016.

Total capacity rose 3.2% from a year earlier to 25.5bn available seat miles (ASMs).

The load factor, which measures how full the aeroplanes are, rose 0.4 percentage points to 83.3% from 82.9% in August 2016.

The company said Hurricane Irma had caused 40 airports in Florida and the Caribbean to close, including American Airlines' hub at Miami International.

Based on preliminary estimates of the financial impact of the storm, the company now expects its third quarter 2017 total revenue ASMs to be roughly flat to 1% higher year-on-year, which marks a shift from previous guidance of +1.5%-2.5%.

Including the impact of higher fuel costs for the quarter, the company now expects its third quarter 2017 pre-tax margin excluding special items1 to be between 8.5% and 10.5%, versus its previous guidance of between 10% and 12%.

The company continues to believe that fourth quarter TRASM growth will exceed third quarter growth.

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Article
April 24 2015

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