American Airlines released yet another subpar earnings report mostly due to the huge jump in the cost of jet fuel this year. In the third quarter of 2018, the world’s largest airline reported 2.6% revenue growth, which failed to offset the 37.6% surge in the average jet-fuel price, which reached 2.30 USD per gallon. Thus, company’s third-quarter profit fell more than 48% yoy as higher fuel costs ate into the largest airline’s bottom line, despite high travel demand.
American Airlines net income in Q3 2018 reached 341 million USD, or 0.74 USD per share, down by 48% from 661 million USD, or 1.36 USD per share, from the same quarter last year. The company generated record revenues of 11.56 billion USD, which represents an increase of 5.4% yoy.
American Airlines adjusted pre-tax margin plummeted to 6%, compared to 10.7% an year earlier.
“Strong demand for American’s service led to record revenue in the third quarter and our eighth consecutive quarter of unit revenue growth”, said the CEO of American Airlines, Doug Parker. “Unfortunately, higher fuel prices increased our expenses by approximately $750 million versus the third quarter of 2017, which led to a decline in earnings”, added he.
The analysts and investors reacted to the negative finance statement of the world’s largest airline. The stocks prices of the company rose to almost 34 USD per share, which is best value in last days, but since the beginning of the year the company lost more than 40% of its market value.
American Airlines is a major United States airline headquartered in Fort Worth, Texas, within the Dallas-Fort Worth metroplex. It is the world’s largest airline when measured by fleet size, revenue, scheduled passengers carried, scheduled passenger-kilometers flown, and number of destinations served. American, together with its regional partners, operates an extensive international and domestic network with an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries.
