American Airlines Tumbles After Surging Expenses
Sep 13, 2023 By MarketDepth
American Airlines (AAL:NASD) tumbled Wednesday after the company says rising fuel costs and other aircraft-related expenses are hitting their bottom line. The new pilot contract is narrowing profit margins as surging inflation is putting pressure on all sectors.
American Airlines is down 20% from the start of the year as inflation pressures mount even as increased demand for flights continues. The stock is down 5% on the day for an intraday price of $13.28.
The company announced a cut in its guidance for the quarter as well as lowering its EPS. The company is still trying to navigate the post-pandemic and high inflationary period by maximizing profits but taking into account increasing expenses. American Airlines cut its third-quarter guidance from $1.25-1.26 billion from $1.3-1.32 billion. Many airlines are following suit with American Airlines as they all are seeing higher operating costs.