American Airlines reports April results, sees headwinds
American Airlines, Philadelphia's largest air carrier, reported Tuesday that its April passenger unit revenue was $18 billion, down 0.2 percent compared to April last year.
American Airlines, Philadelphia's largest air carrier, reported Tuesday that its April passenger unit revenue was $18 billion, down 0.2 percent compared to April last year.
American's planes were 80.4 full, down 1.2 percent from April 2015. Total capacity -- seats and flights -- was up 1.3 percent compared to the period a year ago.
The Fort Worth, Tex.-based carrier, which operates 76 percent of the flights at Philadelphia International Airport, said it expects passenger revenue in the current second quarter for each seat mile flown, a key industry measure, to be down 6 percent to 8 percent.
The strong U.S. dollar, lower fuel surcharges, reduced travel demand in some international markets, and weaker foreign currencies are some factors behind the decline in passenger unit revenue.
Airlines have increased capacity the last couple years due to cheap oil. The major carriers, including American, have lowered fares on some routes where they compete with low-fare carriers, such as Spirit and Frontier. Investors would prefer to see airlines cut capacity and raise ticket prices.
"April traffic results are trickling in and they appear to be better than expected as load factors and unit revenue exceed expectations despite challenging year over year comps," airline analyst Helane Becker said in a client note.
"The stocks do not reflect a better revenue trend," she noted. "Airline stocks are back to lows not seen since October 2014."
American shares rose 68 cents, or 2 percent, to $33.62 in midday trading.
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