American Airlines on Friday raised its forecast of second-quarter revenue, joining a growing list of airlines expecting demand this summer to top previous forecasts as the travel industry recovers from the pandemic.
American predicted that revenue will rise 11% to 13% above the second quarter of 2019. That easily beat the airline’s earlier forecast of a 6% to 8% increase over 2019.
Still, shares of Fort Worth, Texas-based American fell more than 8% in midday trading amid a drop in broad market indexes.
Delta, Southwest, JetBlue, and others have raised revenue forecasts recently, as the number of people flying in the United States creeps closer to pre-pandemic levels. At the same time, airlines are offering fewer flights than they did in 2019, which is helping them push average fares much higher.
American said revenue per seat will jump by up to 22% compared with 2019, easily beating an earlier forecast of up 14% to 16%.
“That revenue is offsetting some real cost pressures out there,” CEO Robert Isom said at an investor conference.
Airfares are up nearly 50% from this time last year, according to figures from banking firm Cowen.
The airline said costs excluding jet fuel will rise by up to 11% per seat, which is a slower increase than Delta. America expects to pay nearly $4 a gallon for fuel, nearly double the price it paid three years ago.