U.S. air carriers like and American Airlines and Spirit Airlines are cutting their third-quarter profit forecasts due to rising fuel costs and other expenses.
Rep. Ro Khanna, D-Calif., discusses the ongoing troubles within the airline industry and growing A.I. fears as Hollywood writers and actors continue to strike.and other rising expenses.
American Airlines said Wednesday in a regulatory filing that it now expects to pay an average between $2.90 and $3.00 per gallon of jet fuel in the third quarter. Alongside the rising fuel costs, American’s labor deal with pilots resulted in a retroactive pay expense of approximately $230 million in the third quarter. American now predicts an adjusted profit between about 20 cents to 30 cents per share in the third quarter, down from its prior range of about 85 cents to 95 cents per share.
Spirit Airlines now expects its adjusted operating margins to fall between 14.5% and 15.5%, larger than earlier estimates of a fall of 5.5% to 7.5%, as the company offered discounts to woo travelers.Florida-based Spirit forecast third-quarter revenue between $1.24 billion and $1.25 billion, against its previous estimate of $1.3 billion to $1.32 billion. Its shares fell 4.6%.
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