Airlines give upbeat view of revenue trends

American, United and Southwest indicated that a key revenue figure was higher than in the same period last year, and American also raised its forecast for profit margin in the second quarter. Shares of airline stocks rose.
By The Associated Press Published: July 10, 2014
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Three of the biggest U.S. airlines are giving upbeat signals about their business as the peak summer travel season kicks into high gear. American, United and Southwest indicated that a key revenue figure was higher than in the same period last year, and American also raised its forecast for profit margin in the second quarter. Shares of airline stocks rose.

Since mergers that started in 2008, airlines have kept a lid on flights, which helps keep fares high enough to balance fuel prices. Of the four biggest U.S. airline companies, only United lost money in the first quarter, and analysts expect all of them to be in the black for the past quarter.

On Wednesday, American Airlines Group Inc. said that passenger revenue for every seat flown one mile would be 5.5 percent to 6.5 percent higher in the second quarter than last year. That’s an important statistic that rises when airlines fill more seats and passengers pay higher average fares.

The company raised its profit-margin forecast for the quarter to between 12 percent and 13 percent, from 10 to 12 percent. Cowen and Co. analyst Helane Becker said the newforecast “provides further evidence that (the second quarter) was a very strong quarter for the airlines.”

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