American Airlines reported a first-quarter profit on Friday that exceeded analysts' expectations as cheap fuel boosted its bottom line.
Continue Reading Below
American, the world's largest airline, said income fell about 25 percent to $700 million, in part because it recorded additional non-cash taxes. Excluding special items, it earned$1.25 per share, above analysts' average estimate of $1.19 per share, according to Thomson Reuters I/B/E/S.
While American's fuel bill dropped by one third, its revenue fell as well.
The Fort-Worth, Texas based airline said extra flights by rivals, soft demand for Latin America travel and the diminished value of foreign sales in dollar terms pushed down passenger unit revenue 7.5 percent from a year ago.
However, a smaller dip of 2.1 percent in the closely watched financial measure for trans-Atlantic flights was encouraging, Sterne Agee CRT analyst Adam Hackel said.
Rival Delta Air Lines Inc had warned last week that average fares on European trips were continuing to fall as carriers across the Atlantic operated flights in excess of demand. Recent attacks in Brussels and Paris have also risked discouraging summer trips by U.S. vacationers.
American's shares were up 1 percent in premarket trading.
(Reporting by Jeffrey Dastin in New York; Editing by Bernadette Baum)