FORT WORTH, Texas (AP) – Fourth-quarter profit at American Airlines fell compared with a year earlier, when the world’s biggest airline received a huge tax benefit, but the results met Wall Street expectations.
American’s report added more evidence to show that revenue trends are improving across the airline industry.
American’s so-called unit revenue – the amount it takes in for every seat flown one mile – rose for the first time since late 2014. That’s an indication that average fares, which fell through 2015 and 2016, are now turning around and are likely to rise this year.
The Fort Worth-based company said Friday that fourth-quarter net income fell to $289 million from $3.28 billion a year ago, when American recorded a $3 billion income tax-accounting benefit.
Excluding a non-cash tax set-aside and certain expenses for fleet changes and costs related to a 2013 merger, American said it would have earned 92 cents per share.
That matched the average forecast of nine analysts surveyed by Zacks Investment Research.
Revenue rose 2 percent to $9.79 billion, slightly higher than the analysts in the Zacks survey expected.
Operating expenses rose faster – more than 5 percent – chiefly on higher labor costs. Airline unions have been negotiating pay raises as the carriers have posted a string of profitable years.
Shares of American Airlines Group Inc. rose $1.09, or 2.2 percent, to $50.68 in premarket trading about an hour before Friday’s opening bell. Through Thursday, the shares had gained 6 percent since the beginning of the year and 25 percent in the last 12 months.