This is terrifying. At a time when other airlines are reporting even little gains for the quarter, American Airlines has reported a massive deficit.
This Monday, American reported its third-quarter earnings, which included a $545 million loss.
The airline stated that its income was lower than planned, personnel expenses were greater, and it had to fund the rise in a new pilot contract. During a conference call the CEO appeared both enraged and dismayed.
"We know there are things that we might have done differently over the past summer that we're trying to make sure that we are addressing in term of where we are flying and how we are doing it," the company's chief executive officer said.
American was compelled to lower its full-year share price expectation to between $2.25 and $2.50 per share, down from a previous forecast of $3 to $3.75 per share. Increased gasoline prices were also a role.
United and Delta, American's primary competitors, both generated a profit in the third quarter and took advantage of the busy summer travel season.
However, American Airlines officials stated that demand for travel remains robust, and they anticipate a good fourth quarter, highlighted by Christmas travel.
In the same quarter last year, American generated over $500 million in profit. However, they pointed out that they did not have to pay over $1 billion in pilot contracts last year.
According to American's chief financial officer, United and Delta boosted their flight schedules, which increased revenue. Still, a loss of more than $500 million must be shocking to stockholders.