(Reuters) -American Airlines on Thursday cut its 2023 forecast for adjusted profit as it struggles to overcome the impact of higher jet fuel prices and expensive labor contracts, sending its shares down about 1.5% in premarket trading.
The company now expects an adjusted profit of $2.25 per share to $2.50 per share for the year, compared with its previous forecast of $3 to $3.75 per share.
Rising costs as well as early signs of moderating domestic travel demand have sparked worries about the industry’s profitability path, sparking a sell-off in airline stocks and prompting analysts to slash their earnings estimates.
American Airlines had warned in August that third-quarter costs would rise following a new labor deal with its pilots that included more than $9.6 billion in total pay and benefits increases over four years.
The company expects its fourth-quarter total revenue per available seat mile (TRASM), a proxy for pricing power, to be down about 5.5% to 7.5%, compared with the year-earlier period.
It reported a net loss of $545 million, or 83 cents per share, for the third quarter ended Sept. 30, compared with a profit of $483 million, or 69 cents per share, a year earlier.
The carrier’s total operating revenue marginally rose to $13.48 billion.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Anil D’Silva)
