American Airlines Earnings: High Costs Mar Revenue Recovery
Air travel demand is starting to rebound as the COVID-19 pandemic eases. American Airlines (NASDAQ: AAL) is implementing an aggressive recovery plan to tap into that demand.
On the surface, this plan might seem to be working. On Thursday, American reported stronger revenue results for the first quarter than its full-service airline peers Delta Air Lines (NYSE: DAL) and United Airlines (NASDAQ: UAL). However, this outperformance on revenue isn't translating to better earnings or cash flow results -- the things that really matter. This suggests that American Airlines' cost structure remains uncompetitive.
In conjunction with American's first-quarter earnings release, management noted that the carrier has reported much stronger passenger unit revenue than Delta and United for three straight quarters. Its total revenue has also been significantly higher. Last quarter, American Airlines generated $4 billion of revenue, compared to $3.6 billion for Delta (excluding its refinery) and $3.2 billion for United.
Source Fool.com
