What to look for when American Airlines (AAL) reports Q1 2024 earnings results

Shares of American Airlines Group Inc. (NASDAQ: AAL) rose 1% on Friday. The stock has gained over 3% over the past three months. The airline is scheduled to report its first quarter 2024 earnings results on Thursday, April 25, before markets open. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenues of $12.6 billion for AAL in Q1 2024, which would represent a growth of over 3% from the same quarter a year ago. In the fourth quarter of 2023, total operating revenues dipped 1% year-over-year to $13 billion.

Earnings

American Airlines expects its adjusted loss per share for Q1 2024 to come at the low end of its prior range of $0.15-0.35. Analysts are forecasting a loss of $0.29 per share for the first quarter, which compares to adjusted EPS of $0.05 reported in the year-ago period. In Q4 2023, adjusted EPS was $0.29.

Points to note

The strong demand for air travel, especially the momentum in business travel, is likely to have helped American Airlines in the first quarter. Last quarter, passenger revenues were down 1% YoY. Total revenue per available seat mile (TRASM) was down 6% YoY in Q4. For the first quarter, AAL expects TRASM to be down 3.5-5.5% YoY.

The company forecasts capacity to be up 6.5-8.5% YoY in Q1 2024. Capacity was up nearly 6% in Q4 2023. Cost per available seat mile, excluding fuel and net special items, or CASM-ex, is expected to be up 2-4% YoY in Q1 2024. Average fuel price per gallon is expected to range between $2.80-2.90 in Q1.

The airline’s AAdvantage travel rewards program is another positive point as it continues to see strength among small and medium-sized businesses. Last year, two-thirds of AAL’s revenue came from AAdvantage customers. These customers also account of 70% of the company’s upsell loyalty and partnership revenue.