UPDATE 2-American Airlines sees no quick end to unit-revenue fall, shares drop
(Rewrites, adds forecasts, company comment)
By Jeffrey Dastin
July 24 (Reuters) - American Airlines Group Inc on Friday said it is facing sharp declines in unit revenue for months to come, sending its stock down nearly 7 percent, even though the company posted its highest profit ever last quarter.
The world's largest passenger carrier expects revenue per available seat mile to fall between 6 percent and 8 percent this quarter. The decline could continue until the second half of 2016, President Scott Kirby told investors Friday
The forecast bodes poorly for the U.S. industry, in part because Kirby attributed the drop to factors largely out of airlines' control.
He said demand has taken a hit as the strong U.S. dollar lowers foreign travelers' spending power and as economies such as Brazil have weakened. American's passenger unit revenue from Brazil fell 24 percent last quarter despite the carrier cutting capacity there by 20 percent to offset the drop.
The supply of flight seats has also outpaced demand in greater Dallas, American's hometown, with Southwest Airlines Co and other low-cost carriers expanding rapidly there.
Rivals Delta Air Lines Inc and United Continental Holdings Inc, which have smaller footprints in both Latin America and Dallas than American, expect passenger unit revenue to drop between 4.5 percent and 6.5 percent, and between 5 percent and 7 percent, respectively.
But American argued for optimism despite these trends. Continuación...