American Airlines plans to cut underperforming routes and add fewer new ones after a spike in fuel costs following President Trump's exit from the Iranian nuclear accord cut profit by nearly half.
Net income fell 48 percent to $341 million, or 74 cents per share, in the three months through September, in line with what analysts expected. Operating costs rose 12.4 percent to $10.9 billion, largely due to a 43 percent jump in fuel prices. The carrier expects fuel costs to spend $2.5 billion on fuel in 2018.
"We have moved quickly to adapt to the higher cost environment with lower planned capacity growth, the cancellation of unprofitable flying, deferral of new aircraft deliveries, and continued aggressive cost management," Chief Executive Officer Doug Parker said in a statement.
At the same time, the carrier is benefiting from growing demand for travel. Passenger revenue per available seat mile, a key metric of airline performance, increased 1.8 percent. Cargo revenue – which is rising across the industry – grew 16.4 percent.
Overall, revenue at the Fort Worth, Texas-based airline climbed 5.4 percent to $11.6 billion in the third quarter. American's stock – which is at lows not seen since July 2016 – rose 3.8 percent to $31.50 in pre-market trading in New York.