How Does American Airlines Expect to Perform in Q1?

American Airlines (NASDAQ: AAL) has provided an update on its performance during the first quarter of 2022. The company expects to report disappointing performance for the quarter when compared with the same quarter in 2019.

Revenue for the quarter is likely to have tanked 16% from Q1 2019. However, it compares favorably with the 17% decline previously projected by the company.

The company said it had flown 59.5 billion total available seat miles, which is 10.7% less than Q1 2019. Further, the cost per available seat mile (CASM) is expected to have increased by 12-13% compared to three years ago, more than American Airlines’ prior guidance of 11-13%.

Fuel costs are also likely to have impacted financial performance in Q1, as the company expects them to come in at $2.80-$2.85 per gallon of jet fuel, up from previous expectations of $2.73-$2.78 per gallon. AAL stated that it consumed about 895 million gallons during the quarter.

American Airlines Earnings

American Airlines is scheduled to report its Q1-2022 earnings on April 20, 2022. The Street expects the company to report a loss of $2.41 for the quarter. Since its earnings beat estimates in the majority of the quarters in 2020 and 2021, the company will likely beat estimates again in Q1.

Wall Street’s Take

Based on the one Buy, eight Holds, and four Sells rating, the stock has a Hold consensus rating. The average American Airlines price forecast of $16.10 implies 13.6% downside potential from current levels. Shares have declined 18.5% over the past year.

Website Traffic

TipRanks’ Website Traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into AAL’s performance.

According to the tool, in March, aa.com recorded an 18.7% monthly increase in global visits compared to the previous year. Likewise, year-to-date website traffic growth has improved 34.9% against the same period last year.

Conclusion

Despite relaxed COVID-19 measures, the reopening of top companies across all sectors, along with the rise in people wanting holidays, airline companies are struggling to return to pre-COVID travel levels.

Further, the Russia-Ukraine war, the spread of the Delta and Omicron variants during January, and uncertainty in international travels might continue to weigh on AAL’s performance.

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