AMR Corp., parent of American Airlines, is expecting a significant boost in unit revenues for the third quarter, fueled by higher fares and a slate of new passenger fees.
In a report filed with the Securities and Exchange Commission Thursday morning, the Fort Worth-based airline said revenues will be up 10 to 11 percent for the third quarter compared to a year ago, when measured by each mile flown by every seat in American’s route network.
Fares were up significantly this summer at American and other airlines as the industry struggled to offset soaring jet fuel costs. American also likely enjoyed some benefit from new and increased fees, such as charges to check baggage.
The airline will end the quarter with about $4.4 billion in unrestricted cash on hand.
Unit costs, however, also appear to be up substantially from a year ago, driven largely by the jump in fuel prices. When measured per seat-mile, operating costs are forecast to be up nearly 22 percent compared to the third quarter of 2007.
Still, the fuel outlook has improved with the recent drop in oil prices. The forecast it will spend $3.55 per gallon on jet fuel during the third quarter, down from a previous estimate of $3.81 per gallon.
Overall, the fuel bill should be about $2.7 billion for the quarter, about $200 million cheaper than AMR’s earlier prediction.
Shares of AMR (ticker: AMR) slipped 25 cents to $10.89 per share in mid-morning trading, a drop of about 2 percent. Airline shares overall were down as crude oil prices inched back toward $100 per barrel.