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American Airlines Group (NASDAQ:AAL) reports Q2 earnings on Thursday before the open on the heels of strong prints from rivals Delta Air Lines (DAL) and United Airlines Holdings (UAL).
The Fort Worth-based airline is expected to report EPS of $1.59 and revenue of $13.73B on solid international demand and limited capacity. Lower jet fuel prices are also buoying the carrier.
On Wednesday, UAL upped its yearly and third-quarter adjusted EPS. Q2 revenue and EPS that beat estimates. In addition, domestic margins returned to 2019 levels while international margins were well above those levels. Last week, DAL said it generated record operating revenue of $14.6B during the second quarter, up 19% from a year ago. DAL’s average price per fuel gallon also fell from a year ago.
TD Cowen expects AAL’s management team to echo Delta’s (DAL) comments around strong performance for international and premium products.
“We are interested in hearing more about how each airline is thinking about their network strategy in light of recent IROPs at EWR and the wind down of the NEA,” TD Cowen analysts led by Helane Becker wrote in a July 17 note. “Debt paydown will also be a focus.”
Earlier this year, a federal judge ruled that the Northeast Alliance, or NEA, partnership between JetBlue Airways Corporation (JBLU) and American (AAL) was anticompetitive and ordered the airlines to undo the accord. The alliance allowed the airlines to share passengers and revenue in the Northeastern U.S. AAL has said it plans to appeal the decision.
Susquehanna International Group said it will be looking for updates on pilot union negotiations and aircraft deliveries with Boeing (BA) slowing B787 deliveries and Airbus (OTCPK:EADSF) warning of A320 family delays.
“We view 2024 as a more normalized operating environment for the airlines, though near-term do see growing risk of an economic downturn and delays in aircraft deliveries,” Susquehanna wrote in a July 12 note.
