American Airlines stock surges on upbeat sales outlook

American Airlines (AAL.US) shares rose sharply on Thursday after the air carrier’s recorded narrower than expected quarterly loss and provided an upbeat guidance for the current quarter.

• Company recorded adjusted loss of $2.32 per share, down from a loss of $4.32 per share over the same period last year  and below analysts’ estimates of $2.40 
• Revenue of $8.90 billion, topped market estimates of $8.79 billion  and represents 84% of revenue in the same period in pre-pandemic 2019. Strong pickup in travel in March managed to offset weak  January caused by the Omicron variant of COVID-19.
• Load factor increased to 74.4% from 59.5%, as traffic surged 97.2% to 44.29 billion revenue passenger miles while capacity jumped 57.6% to 59.53 billion available seat miles. 
• Despite high fuel prices, the company expects to be profitable in the second quarter based on improving demand trends.
• American believes that in Q2 capacity will be 92% to 94% of 2019 levels, and revenue will beat the 2019 level by 6% to 8%. That’s still more than competitors Delta Air Lines and United Airlines, which are not so bold about restoring capacity throughout the pandemic.
• "The work we have accomplished over the past two years — simplifying our fleet, modernizing our facilities, fine-tuning our network, developing new partnerships, rolling out new tools for customers and team members, and hiring thousands of new team members — has us very well-positioned as the industry continues to rebound” said new CEO Robert Isom

American Airlines (AAL.US) stock launched today’s session with a bullish price gap, however buyers failed to reach local resistance at $21.85 which coincides with 23.6% Fibonacci retracement of the upward wave started in May 2020. Price pulled back and is currently testing the upper limit of the earlier broken ascending channel. Should break lower occur, downward correction may deepen towards support at $19.25 which is marked with 38.2% retracement. Source: xStation5