The last two years have posed the biggest threat to commercial airlines in history; with widespread, intermittent travel bans weighing on hopes to claw back revenue. Balancing travel optimism with emerging variants has created a problematic landscape for airlines, but brief windows of travel have allowed some sort of respite.
American Airlines stock edged up just over 1% in Thursday premarket, following the company Q4 report which, in essence, illustrates some degree of improvement compared to previous quarters. The company posted its highest revenue over the course of the two-year pandemic as bookings are starting to rise once again. However, although the revenue increase is an important indicator of returning travel trends, the company isn’t out of the woods yet – posting a second annual loss.
AAL lost $931M in Q4 on revenue of $9.43B, which was slightly lower than the Wall Street consensus. The company also posted a loss of $1.42 a share, slightly higher than the estimates of $1.48 per share. Looking forward, AAL expects Q122 revenue to stand at roughly 20% off the same period in 2019 – which generated $10.6B in sales.
American Airlines CEO Doug Parker, stated:
“Over the past year, we have experienced periods of high travel demand countered by periods of decreased demand due to new COVID-19 variants,”
“This volatility has created the most challenging planning environment in the history of commercial aviation.”
As made clear, such a volatile environment has impacted Airlines’ ability to adapt or plan ahead near on impossible. Moving into 2022, AAL could be an attractive buy at its current levels bearing in mind the likely influx of travel and the easing of pandemic panic selling.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage . 68 % of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money .
Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.