American Airlines (AAL) Earnings for the Second Quarter of 2023

American Airlines on Thursday raised its 2023 earnings forecast after a strong start to the peak travel season, the latest airline to reap the rewards of an ongoing boom in demand.

The Fort Worth-Texas-based carrier expects to earn between $3 and $3.75 a share for the full year, adjusting for one-time items, up from a forecast in May to earn about $2.50 to $3.50. Updated earnings guidance for 2023 is in line with Wall Street’s forecast of $3.10, according to Refinitiv’s consensus estimate.

Airline executives have been optimistic about travel demand, especially for international travel. Some airfares are down compared to last year, when airlines struggled to rebuild their schedules after the worst of the pandemic, leaving travelers with fewer flights and seats to choose from.

American said Thursday that it expects unit revenue to decline 6.5% in the third quarter year-over-year with capacity growth of up to 7% compared to the same period in 2022. For the third quarter, American expects to achieve an average of 85. cents to 95 cents a share, in line with estimates.

The company’s projections include costs from business deals, such as an initial agreement with pilots. However, the US pilots union is seeking improvements to its initial contract after a deal was struck but rival United and its pilots union last week.

“In terms of wages, we’re going to match those,” US CEO Robert Isom told CNBC’s Phil LeBeau on Thursday. “I want our pilots to know that.”

Here’s how American Airlines performed Second Quarter Compared to what Wall Street expected, based on average analyst estimates compiled by Refinitiv:

• Adjusted earnings per share: $1.92 vs. $1.59 expected
• Total revenue: 14.06 billion dollars, compared to the expected 13.74 billion dollars

American reported second-quarter net income of $1.34 billion, or $1.88 per share, up from $476 million, or 68 cents per share, in the same period a year earlier. Adjusting for one-time items, including costs associated with aircraft retired early in the pandemic, the company earned $1.37 billion, or $1.92 per share.

Record revenue of $14.06 billion exceeded analyst expectations and rose 4.7% from the prior year.

The airline’s flying capacity was up 5.3% from last year.