Why Is American Airlines Stock Flying Higher Today?

American Airlines Group Inc AAL reported a 75% drop in adjusted earnings to $0.29 per share in the fourth quarter of 2023 but still came in well above the consensus estimate of $0.10.

Total revenue decreased 1% to $13.06 billion, just beating estimates of $13.02 billion.

For the fourth quarter of 2023, American Airlines reported a net income of $19 million, down nearly 98% from $803 million a year ago.

Guidance: American Airlines expects its first-quarter 2024 adjusted loss per diluted share of ($0.15)-($0.35), versus the consensus of $(0.17). 

American expects its full-year 2024 adjusted earnings per diluted share of $2.25-$3.25 versus the consensus of $2.25.

The company expects its first-quarter 2024 capacity to be up approximately 6.5% to 8.5% Y/Y, with full-year capacity to be up mid-single digits Y/Y.

The first-quarter total revenue per available seat mile (TRASM) is expected to be down approximately 3.5% to 5.5% YY, and full-year TRASM is expected to be approximately flat to down 3% Y/Y.

The company expects its first-quarter cost per available seat mile (CASM-ex), excluding fuel, to be up approximately 2% to 4% Y/Y, with its full-year CASM-ex up approximately 0.5% to 3.5% Y/Y.

The Boeing Co’s BA 737 Max 9 has garnered industry attention following its grounding by the Federal Aviation Administration (FAA) due to a midflight incident earlier this month.

Although American Airlines does not operate the 737 Max 9, it does have the 737 Max 8 in its fleet, with plans to acquire 20 more this year, CEO Isom said. 

However, the FAA’s recent decision to halt Boeing’s capacity to increase production of the 737 Max could impact future aircraft deliveries.

“We have a safety management system that we worked on with the FAA, and in that, we try to identify anything that may be an issue or cause for further investigation – and that even holds true when it comes to taking aircraft deliveries,” Isom told CNBC on “Squawk Box.” 

“We need all of our partners… to do their job, and that’s producing a quality product.”

Price Action: AAL shares are up 8.15% at $15.07 on the last check Thursday.

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