American Airlines (AAL) 1Q 22 earnings

American Airlines on Thursday forecast a second-quarter pretax profit as strong bookings help it cover soaring fuel costs, the latest airline to report robust travel demand is outpacing expenses.

American, the country’s largest airline, said March was the first month since the pandemic began that its revenue surpassed 2019 levels and said bookings have continued to rise.

The carrier forecast second-quarter sales as much as 8% higher than the same period three years ago even though it plans to fly between 6% and 8% less than its 2019 schedule. That’s still more than competitors Delta Air Lines and United Airlines, which have been more conservative about restoring capacity throughout the pandemic.

American forecast business-travel revenue will be 90% recovered to 2019 levels in the second quarter, led by small- and midsize companies.

“I’m a new CEO. People want to come and see me. It’s the same thing in the rest of the economy,” new CEO Robert Isom told CNBC’s “Squawk Box.” “People have been cooped up too long, relationships have faded, and they need to be reestablished.”

American is the third major airline to report quarterly results. United said Wednesday it expects to return to a profit this year thanks to a surge in bookings and fares, echoing similar comments a week earlier from Delta. United’s forecast sent airline stocks higher in after-hours trading Wednesday.

American shares surged after reporting results and were up more than 7% in morning trading Thursday, rising from a roughly 5% increase fueled by United’s results. United was up more than 11%. Delta and Southwest Airlines, which reports next week, each rose about 5%.

Here’s how American performed in the first quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

  • Adjusted loss per share: $2.32 versus an expected $2.40
  • Total revenue: $8.9 billion versus expected $8.826 billion

American posted a net loss of $1.6 billion in the first quarter on revenue of nearly $8.9 billion, more than double its $4 billion in sales a year ago and ahead of analyst estimates. Sales were down 16% compared with the same quarter of 2019.

The Fort Worth, Texas-based airline said it paid $2.80 a gallon for fuel in the first quarter, up 65% from last year. American stopped hedging fuel after oil prices cratered in 2014.