New York (AFP) – American Airlines reported a smaller than expected loss Thursday, pointing to robust travel demand from wealthier customers that has offset weakness among lower-income consumers. The big US carrier reported a loss of $114 million in the third quarter, smaller than the $149 million loss in the year-ago period and also better than analyst forecasts. Revenues edged up 0.3 percent to $13.7 billion.
American executives described the operating climate as gradually improving throughout the summer months and into the fourth quarter as macroeconomic uncertainty tied to President Donald Trump’s trade policies ebbed. American Chief Strategy Officer Steve Johnson said premium revenues “have been strong all year long,” but that the biggest improvement in the recent period had been in main cabin revenues where the economic worries were most acute. “It’s been very difficult on main cabin revenue, the demand from our most price-sensitive customers,” he said in an earnings conference call. American projected fourth-quarter revenue growth between three and five percent.
Now in its fourth week, the government shutdown has loomed over airline results in recent weeks. Key government employees in air traffic control and airport security continue to work, but are not being paid. Airlines have described the impact as mostly limited thus far, but executives have warned of a bigger drag if it goes on too long. American Chief Executive Robert Isom said the company’s revenues had been hit by less than $1 million a day from diminished government travel at Washington National Airport. Isom said there had been “some difficulty in terms of operating delays and issues with air traffic control” but that he believed those problems were temporary. Shares of American rose 4.3 percent.
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