American Airlines stock edged higher Tuesday after the company issued preliminary first-quarter revenue estimates that came in slightly higher than expected.
For the first quarter of 2022, American Airlines (ticker: AAL) posted preliminary revenue of $8.89 billion, above consensus estimates for $8.77 billion. This is a 16% decline from the first quarter of 2019, which is ahead of the 17% decrease the company had previously anticipated , American said. This is also above an earlier forecast for a 20% to 22% drop.
During the first quarter, the company flew 59.5 billion available seat miles, down 10.7% from the same quarter in 2019. Quarterly CASM, or cost per available seat mile, is expected to be up between 12% and 13% from 2019, ranging between $17.79 and $17.98. The lower margin is up from previous guidance indicating it would be up between 11% to 13%.
In addition, American is projecting it will end the first quarter with approximately $15.5 billion in total available liquidity.
The company expects its cost for jet fuel to be between $2.80 and $2.85 per gallon, up from a range of $2.73 and $2.78 issued in its previous guidance in March. The increase in jet fuel costs is hardly surprising, given the surge in global oil prices following Russia's invasion of Ukraine in late February. In the past, jet fuel prices have tracked closely with oil prices , pressuring the airline sector.
But investors did not seem too concerned over the potential impact rising oil could have on American's earnings — possibly because oil prices have begun to normalize , or because the increase already has been priced into the stock. American stock was up 1.3% to $17.19 on Tuesday, but the shares have lost 5.5% this year and 24% over the last 12 months.
American has issued guidance comparing future performance to comparable 2019 quarters for more than a year, as the airline looks to return to its pre-pandemic capacity.
The company reports earnings on April 21 at 7:30 a.m. Eastern. Delta Air Lines (DAL) kicks off earnings season for airlines Wednesday, and has scheduled a call with investors for 10 a.m.