Jan 27 (Reuters) – American Airlines forecast 2026 profit above analysts’ expectations on Tuesday, buoyed by a recovery in corporate travel and strong demand for high-margin premium services.
The carrier said its outlook reflects a preliminary estimate of the impact of the ongoing winter storm that has swept through much of the United States. As a result of the storm, airlines were forced to cancel thousands of flights on Monday.
American projected a hit of about $150 million to $200 million in the current quarter due to the storm.
“The storm has resulted in more than 9,000 flight cancellations to date, making it the largest weather-related operational disruption in American’s history,” the carrier said in a statement.
With lower-income travelers feeling the strain of tighter budgets amid a challenging macroeconomic backdrop, airlines are increasingly turning to affluent customers ready to pay top dollar for high-margin premium offerings.
A post-pandemic shift in consumer behavior has found airlines firming up their bets on premium services.
American Airlines has been stepping up its premium upgrades to catch up with rivals Delta Air Lines and United Airlines and capture a bigger share of surging demand for higher-end travel.
Corporate travel, on the other hand, has also shown improvement. Shares of the company rose over 3% in premarket trading.
American expects its full-year adjusted profit per share in the range of $1.70 to $2.70, compared with analysts’ average estimate of $1.97 per share, according to data compiled by LSEG.
The airline’s total operating revenue in the fourth quarter rose 2.5% to about $14 billion, falling marginally short of the $14.03 billion analysts had expected.
That number includes a negative impact of about $325 million, American said, due to delays and cancellations from a historic U.S. government shutdown over the fall.
Its fourth-quarter adjusted profit came in at 16 cents per share, also missing estimates of 34 cents per share.
(Reporting by Shivansh Tiwary and Utkarsh Shetti in Bengaluru; Editing by Maju Samuel)
