Jan 27 (Reuters) – American Airlines forecast its 2026 profit above Wall Street expectations on Tuesday even as it flagged a hit of up to $200 million from a winter storm that has forced thousands of flight cancellations in recent days.
The carrier’s outlook reflects a preliminary estimate of the impact from Winter Storm Fern, which has swept through much of the U.S., leading the airline to project a hit of about $150 million to $200 million in the current quarter.
“The storm has resulted in more than 9,000 flight cancellations to date, making it the largest weather-related operational disruption in American’s history,” the carrier said in a statement.
The sprawling storm gripped over two dozen U.S. states over the weekend, and is expected to result in insured losses ranging from just under $1 billion to the single-digit billions, according to experts.
American Airlines CEO Robert Isom told CNBC the airline will get “back on track” over the next two to three days.
AMERICAN EXPECTS STRONG 2026
American expects its full-year adjusted profit in the range of $1.70 to $2.70 per share, compared with analysts’ average estimate of $1.97 per share, per data compiled by LSEG.
Its outlook signals expectations for a continued recovery in corporate travel and strong demand for its high-margin premium services.
Shares of the company rose nearly 4% in premarket trading.
With lower-income travelers feeling the strain of tighter budgets amid a challenging macroeconomic backdrop, airlines are increasingly turning to affluent customers ready to pay top dollar for high-margin premium offerings.
American Airlines has been stepping up its premium upgrades to catch up with rivals Delta Air Lines and United Airlines and capture a bigger share of surging demand for higher-end travel.
The airline’s total operating revenue in the fourth quarter rose 2.5% to about $14 billion, falling marginally short of the $14.03 billion analysts had expected.
That number includes a negative impact of about $325 million, American said, due to delays and cancellations from a historic U.S. government shutdown over the fall.
Its fourth-quarter adjusted profit came in at 16 cents per share, also missing estimates of 34 cents per share.
(Reporting by Shivansh Tiwary and Utkarsh Shetti in Bengaluru; Editing by Maju Samuel)