American Airlines on Friday raised its forecast of second-quarter revenue, joining a growing list of airlines expecting demand this summer to top previous forecasts as the travel industry recovers from the pandemic.
American predicted that revenue will rise 11% to 13% above the second quarter of 2019. That easily beat the airline's earlier forecast of a 6% to 8% increase over 2019.
Still, shares of Fort Worth, Texas-based American fell more than 8% in midday trading amid a drop in broad market indexes.
Delta, Southwest, JetBlue and others have raised revenue forecasts recently, as the number of people flying in the United States creeps closer to pre-pandemic levels. At the same time, airlines are offering fewer flights than they did in 2019, which is helping them push average fares much higher.
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American said revenue per seat will jump by up to 22% compared with 2019, easily beating an earlier forecast of up 14% to 16%.
"That revenue is offsetting some real cost pressures out there," CEO Robert Isom said at an investor conference.
Airfares are up nearly 50% from this time last year, according to figures from banking firm Cowen.
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The airline said costs excluding jet fuel will rise by up to 11% per seat, which is a slower increase than Delta. American expects to pay nearly $4 a gallon for fuel, nearly double the price it paid three years ago.