American Airlines revises Q4 guidance; signs deal with Citi for credit cards

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American Airlines revises Q4 guidance; signs deal with Citi for credit cards

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By Sky Industry News

Dec 6, 2024

American Airlines has adjusted its fourth-quarter guidance, aligning with JetBlue and Southwest Airlines in response to an improving pricing and revenue environment. The airline stated that conditions have improved since its previous forecast in October.

“The pricing and revenue environment has continued to improve since the Company’s prior fourth-quarter guidance issued on October 24, 2024.”

The company's total revenue per available seat mile (TRASM) is now expected to remain stable or increase by up to 1% year-on-year, contrary to earlier expectations of a 1% to 3% decline. However, the cost per available seat mile, excluding fuel (CASM-ex), is anticipated to rise slightly due to increased profit-sharing accruals driven by higher earnings.

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As a result, American Airlines projects its adjusted earnings per diluted share (EPS) for Q4 will range from $0.55 to $0.75, exceeding the previous estimate of $0.25 to $0.50.

American Airlines CEO Robert Isom noted that while October was strong, there were weaker periods around Halloween and the election. “But the fourth quarter as a whole, strong October, some weakness in early parts of November as a result of Halloween and the election. Not unexpected," Isom remarked.

JetBlue President Marty St. George reported positive unit revenue growth into Q4 despite challenges such as Hurricane Milton and the election impacting revenues.

Southwest Airlines President Bob Jordan mentioned adjustments in flight schedules for lower demand periods while increasing activity during peak holiday times.

In addition, American Airlines announced an exclusive agreement with Citigroup for its AAdvantage co-branded credit card portfolio starting January 2026. The company expects cash remuneration from this partnership to grow by about 10% annually.

“As a result of the new agreement and based on our current projections, including current macroeconomic assumptions and new customer acquisition and other program growth, American presently expects cash remuneration from its co-branded credit card and other partners to grow by approximately 10% annually.”

Between September 2023 and September 2024, cash earnings from these partnerships reached approximately $5.6 billion with an anticipated annual pre-tax income benefit nearing $1.5 billion.