American Airways (AAL) Q3 2022

An American Airlines Boeing 787-9 Dreamliner lands at Miami International Airport in Miami, Florida on December 10, 2021.

Joe Raedle | Getty Images

American Airlines reported a profit of $483 million for the third quarter and joined peers in forecasting resilient travel demand as the airline industry continues to shake off concerns about an economic slowdown.

American’s revenue rose to a record $13.46 billion in the three months ended Sept. 30, up 13% from 2019, despite flying nearly 10% less, a sign that passengers are defying higher fares still travel. Quarterly sales came in slightly above analysts’ estimates.

“Demand remains strong and it’s clear customers continue to appreciate air travel and the ability to reconnect post-pandemic,” CEO Robert Isom said in an employee note on Thursday after the company reported the results.

American said it expects strength to continue through the end of the holiday season. For the fourth quarter, total sales are expected to increase by up to 13% compared to three years ago, prior to the Covid pandemic. It forecasts that its capacity will fall 5% to 7% during the quarter from 2019 and forecast adjusted earnings per share of between 50 cents and 70 cents.

Shares of the company rose more than 2% in premarket trading after the report.

Here’s how American performed in the third quarter versus Wall Street expectations, according to consensus estimates from Refinitiv:

  • Adjusted earnings per share: 69 cents versus expected 56 cents.
  • Total sales: $13.46 billion versus $13.42 billion expected.

American last week raised its guidance for third-quarter sales, pushing shares higher.

rivals United Airlines and Delta Airlines also predicted that they would be profitable by the end of the year thanks to strong bookings and fares.

The industry is seeing strong travel demand well into the fall season as consumers continue to fly, in many cases paying more than in 2019. All three major airlines have touted higher unit numbers compared to three years ago, before the pandemic, a trend that helps them to more than compensate for an increase in costs.

American’s fuel bill nearly doubled year over year to more than $3.8 billion, while labor costs rose 12% to $3.4 billion.

The Fort Worth, Texas-based airline said its cost per available seat mile is likely to increase by 8% to 10% for the last three months of the year compared to the same quarter of 2019 and by up to 13% for the full year three years ago .

American executives will host a call with analysts at 8:30 a.m. ET to discuss the results when they are likely to face questions about 2023 booking forecasts, business travel demand and labor negotiations.

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