Brazilian aircraft manufacturer Embraer has announced that American Airlines has committed to purchasing four E175 jets, which will be used by Envoy Air for regional flights. The order is worth approximately $230.6 million and the planes are expected to be delivered in late 2024. This order will help expand Envoy Air’s fleet to over 150 planes by the end of next year. In other news, American Airlines has reported a decrease in its annual profit forecast due to higher fuel prices, expecting to earn $2.25 to $2.50 per share for the year.
Brazilian airplane maker Embraer recently revealed that American Airlines has made a solid commitment to buy four E175 jets. These planes will be used by Envoy Air, which is a part of American Airlines and operates smaller regional flights. The price of this order is around $230.6 million. The delivery of these planes is expected in the last part of 2024.
This order will help boost Envoy Air’s fleet, making it bigger with over 150 planes by the end of next year. This follows another order for seven E175 planes that American Airlines made back in June.
In other developments, American Airlines experienced financial difficulties in the third quarter, causing the business to decrease its annual profit forecast. The main cause for this is the growing cost of fuel.
The airline now expects to earn $2.25 to $2.50 a share for the whole year, down from $3 to $3.75 in July. This revised estimate, on the other hand, matches what experts projected. They also forecast a lower operational profit margin this year, down from 10% before.
American Airlines expects to make or lose money in the fourth quarter of this year.
Here’s how American Airlines performed in the third quarter compared to what experts expected:
- Earnings per share: 38 cents (average: 25 cents).
- Sales were predicted to be $13.52 billion, but were actually $13.48 billion.
Despite the fact that the epidemic has caused more individuals to travel, airfares are lower this year than last. American Airlines expects a 5.5% to 7.5% decrease in revenue per flight unit in the fourth quarter of this year compared to the previous year. The price of each unit, excluding fuel, is predicted to rise by 5% to 7% by 2022, while the number of available flights will rise by 4.5% to 6.5%.
During the third quarter, the company faced a loss of $545 million, which is equal to 83 cents per share. This is a big change from the profit of $483 million, or 69 cents per share, in the same period the year before. It’s the first time the company lost money since the first quarter of 2022, even though they flew 7% more than they did the previous year.
Despite problems like rising fuel costs reducing profitability in the quarter, American Airlines CEO Robert Isom stated that the team is doing a fantastic job of managing what they can manage, allowing the firm to prosper in any environment.
After adjusting for the higher expenses associated with a new labor deal with pilots, the business posted earnings of $263 million, or 38 cents per share. Their earnings increased by 0.1% over the same time period the prior year.