Hurricane Florence costs American Airlines USD50 million
American Airlines says it took a $50 million hit from the disruption wrought by Hurricane Florence.
The Fort Worth-based carrier was forced to cancel more than 2,000 flights in the Southeast.
That caused an expected revenue drop of $55 million which was slightly offset by $5 million cost savings due to operating fewer flights.
Delta Air Lines recently said it saw revenues fall by $30 million due to the storm.
It didn’t weigh heavily on American’s overall performance thanks to strong domestic yields, but investors weren’t impressed.
AA’s share price sank 6.5% to a two-year low of $33.55.
"I am surprised by the weakness in American shares. We thought the update was positive and while fuel has moved higher, shares already fell on that," said Savi Syth, an airline analyst at Raymond James Financial.
The concern for investors is the continued rise of fuel prices.
American no longer has a fuel hedging policy, and has seen its jet fuel expenses rise nearly 40% in the past year.
The airline is due to post third-quarter earnings later this month.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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