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July 09, 2014

American says June passenger traffic rose 1.0 percent, updates investors on Q2 financials

American Airlines file art 10American Airlines said passenger traffic was up 1.0 percent in June as the airline increased its capacity by 3.2 percent.

As a result, its load factor dropped 1.9 percentage points to 85.0 percent.

The Fort Worth-based carrier also updated investors on its second quarter earnings which it expects to report later this month.

American disclosed that it will have between one-time accounting charges of about $600 million due to bankruptcy and merger items and from the selling of its fuel hedging contracts. American said as of June 30, it no longer has any outstanding fuel hedging contracts.

For the second quarter, American expects to pay an average of between $3.01 and $3.06 per gallon of mainline jet fuel.

The carrier also told investors that its capacity is expected to be up about 3 percent partly due to larger aircraft replacing smaller planes in its fleet and better aircraft utilization. International capacity will be up 6 percent while domestic capacity will be up about 1 percent.

"'Boom.' 'The lights are back on.' These were just two of the initial investor reactions shared with us in immediate response to AAL’s pre-market guide-up," J.P. Morgan analyst Jamie Baker wrote in a research note issue on Tuesday after American released its investor update.

In mid-morning trading, American shares [ticker: AAL] were up about 2 percent, or 85 cents, at $41.11.

-Andrea Ahles

 

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