The country's biggest air carrier American Airlines (AAL) - Get American Airlines Group, Inc. Report said Wednesday that August revenue will likely be below expectations as rising COVID-19 cases lead to a drop in bookings and reservations.
Shares of the Fort Worth, Texas, company at last check rose 2% to $20.23.
With weaker near-term bookings and higher cancellations, American Airlines Chief Revenue Officer Vasu Raja said this was expected and described the situation as a "choppy recovery," while speaking at an industry conference.
Other U.S. carriers including Frontier (ULCC) - Get Frontier Airlines Report, Southwest (LUV) - Get Southwest Airlines Co. Report and Spirit (SAVE) - Get Spirit Airlines, Inc. Report have previously warned that new cases of infectious COVID-19 variants are driving down bookings.
The U.S. currently has over 38 million confirmed coronavirus cases. Over 90,000 coronavirus patients were in hospitals nationwide, more than in any previous surge except last winter’s, according to the New York Times. The country is averaging more than 800 newly reported deaths a day, about twice as many as in early August, the Times report added.
American Airlines said it is preparing for a more “muted” uptick in business travel into the fourth quarter, but did not share a change in financial guidance yet, according to Bloomberg News.
In July, American Airlines posted a narrower-than-expected second-quarter loss, but held off on predicting the carrier's return to profit later this year.
Group revenues surged 87% from the first quarter and 361% from last year to $7.48 billion, American Airlines said earlier, and topped the Street consensus forecast of $7.34 billion.
American Airlines last month reported its first positive cash flow since the pandemic started.
On July 29, American cautioned pilots that there may be fuel delivery delays at some mid-size airports and urged them to conserve fuel.