Sky Talk

Analyst predicts $2.5 billion tailwind for American in 2015

It’s early in the new year and a Wall Street analyst is predicting a great year for American Airlines.

Wolfe Research analyst Hunter Keay told investors that American “might enjoy more than $2.5 billion” in AAL-specific tailwinds” when compared to its top two competitors, Delta Air Lines and United Airlines.

In his Friday research note, Keay said American will benefit from falling oil prices since it does not hedge its jet fuel cost and will not have to pay out profit-sharing to employees.

“No profit-sharing means AAL should keep at least $1.2 billion in profits next year vs. other legacy airlines. AAL is in the process of bumping base pay for nearly all employees, but this is a model-able event and it puts pressure on peers to bump their base pay rates for employees who surely have no interest in relinquishing existing profit sharing plans,” Keay wrote.

Shares of American [ticker: AAL] rose 115 percent in 2014, increasing $28.69 per share to close at $53.63 on Wednesday, December 31.