UPDATE 2-American Airlines expects fuel savings, currency headwind in 2015
(Recasts; adds company comment, details throughout)
By Jeffrey Dastin
Jan 27 (Reuters) - American Airlines Group Inc on Tuesday forecast billions of dollars in savings this year from tumbling fuel costs, but said a key measure of revenue will likely decline this quarter, in part from currency headwinds that are pinching foreign travelers' pockets.
The world's largest carrier by passenger traffic said its 2015 costs will drop by $5 billion because of the oil glut, which has driven down global oil prices by more than 57 percent since June.
While closing costly fuel hedges has prevented its peers from benefiting from the full price decline, American has no hedges in place and expects its fuel price to be an industry-leading $1.71 to $1.76 per gallon in 2015.
It forecast a strong 13 percent to 15 percent pre-tax margin for the first quarter.
Yet American's outlook on unit revenue disappointed Wall Street, sending its shares down 3.4 percent in mid-afternoon trading.
The carrier expects a 2 to 4 percent decline in unit revenue for the first quarter year-over-year, while competitors such as United Airlines have said their unit revenue will be between negative 1 percent and 1 percent.
Unit revenue "is being pressured in a number of markets where capacity is growing faster than demand," American Airlines President Scott Kirby said during the company's quarterly call. Total system capacity in 2015 is expected to grow between 2 and 3 percent, the airline reported. Continuación...