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American Airlines Group suffers turbulence in pre-market despite second quarter beat

Last updated: 09:15 28 Jul 2017 EDT, First published: 04:15 28 Jul 2017 EDT

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The economy line has gone down very well

American Airlines Group Inc (NASDAQ:AAL) shares flew lower in pre-market, having gone higher earlier after strong demand saw it beat revenue and profit forecasts in its second quarter.

US airlines have had some negative press in 2017 but American seems to be riding out the storm comfortably.

Adjusted earnings per share (EPS) for the three months came in at US$1.92 against the US$1.87 projected by Wall Street consensus, while revenue flew up to US$11.11bn compared to the US$11.08bn projected.

READ: Trump faces new headache as Qataris eye 10% stake in American Airlines

Less positive though was news that operating expenses had widened, increasing 11.1% to US$9.6bn due to higher fuel and labour costs.

"Our strong revenue growth is a credit to our more than 120,000 team members and evidence that these investments are working," said Doug Parker, American's chairman and chief executive.

"Looking forward, we are enthusiastic about our prospects for the second half of 2017, as well as 2018 and beyond."

Notably, American has expanded its no-frills economy line,  which seems to have gone down well with customers.

It is now installing the economy seats on Boeing 777-200 planes and plans to retrofit most of its other wide-body planes by the end of next year.

In all, American plans to invest US$4.1bn in new planes this year.

In the latest three months, it invested US$1.1bn in 20 new planes that will replace older aircraft.

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