American Airlines Group (AAL) said this week it projected higher costs during the current quarter amid looming worker shortage and surging jet fuel prices globally due to Ukraine crisis.
The air carrier expects a pretax loss, excluding special items, within the range of 21.3% to 22.6% during the quarter.
American Airlines said it now expected cost per available seat miles, excluding costs related to fuel and net special items, to be within the range of 12% to 13%, compared with a March forecast of an 11% to 13% range.
The air carrier revised up its jet fuel cost forecast for the quarter, as it now projects to pay between $2.80 and $2.85 per gallon on average, compared with a prior forecast of $2.73 to $2.78 per gallon.
The company also projects an almost 16% slump in its quarterly total revenue compared to pre-pandemic levels.
American Airlines shares closed higher for a second consecutive trading session on NASDAQ on Tuesday. The stock went up 0.94% ($0.16) to $17.13, after touching an intraday low at $16.69 and an intraday high at $17.16 respectively.
Shares of American Airlines Group have retreated 4.62% so far in 2022 compared with a 7.74% loss for the benchmark index, S&P 500 (SPX).
In 2021, American Airlines’ stock went up 13.89%, thus, it underperformed the S&P 500, which registered a 26.89% gain.
Analyst stock price forecast and recommendation
According to TipRanks, at least 8 out of 13 surveyed investment analysts had rated American Airlines’ stock as “Hold”, while 4 – as “Sell”. The median price target on the stock stands at $16.10.