American Airlines Group Inc. Lowers Upper End of Passenger Growth Forecast
American Airlines today announced its June operating results and lowered its forecast for second-quarter growth in passenger revenue per available seat mile.
The company said revenue passenger miles, or RPMs, rose by 1% year over year, to 19.9 billion, in the month, while total available seat miles rose by 3.2%, to 23.4 billion. As a result, its load factor -- the percentage of seats filled by paying passengers -- fell by 1.9 percentage points, to 85%.
International flights were the primary reason for the dip in efficiency. RPMs rose just 0.7%, while available seat miles rose by a staggering 7% to 8.2 billion. The load factor for American Airlines international flights fell from 85.9% in June 2013 to 80.9% last month. This decline primarily came from its Atlantic and Latin America flights, which saw load factors decline by 5.4 and 5.2 percentage points, respectively.
Through the first six months of the year, the dip in load factor is not as significant at the 1.9 percentage-point drop seen in June -- as load factor sits at 82.2%, down 0.4 percentage points relative to the first six months of 2013.
American Airlines also noted it expects second-quarter passenger revenue per available seat mile to rise between 5.5% and 6.5%, year over year. This guidance falls below the 5.5% to 7% gain it projected when it announced traffic results for May.
American Airlines also said it expects to post as much as $630 million in charges in the second quarter, related to fuel hedging contracts and its merger with US Airways. About $330 million of the charges are related to selling its fuel hedging contracts and about $250 million to $300 million is related to its bankruptcy restructuring and merger with US Airways.
-- Material from The Associated Press was used in this report.
Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. And there's one small company making Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!
The article American Airlines Group Inc. Lowers Upper End of Passenger Growth Forecast originally appeared on Fool.com.Patrick Morris owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.