American Airlines sees higher quarterly costs as labor, jet fuel prices soar

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As demand returns, carriers are shelling out more to attract new staff as well as retain the existing crew amid looming worker shortage. Rising jet fuel prices around the world caused by Ukraine crisis are also impacting these carriers.

American projects a pretax loss, excluding special items, in the range of 21.3% to 22.6% for the first quarter.

The carrier said it expects its CASM (cost per available seat miles) to be up between 12% and 13% versus 11% and 13% predicted last month, excluding costs related to fuel and net special items. Overall CASM is estimated to be at least 16% higher than in the first quarter of 2019.

Shares of American fell about 1% to $16.81 in early trade.

The airline raised its jet fuel expenses for the quarter. It now expects to pay an average of between $2.80 and $2.85 per gallon, higher than its previous estimate of $2.73 and $2.78 per gallon.

Meanwhile, American expects quarterly total revenue to fall about 16% compared to pre-pandemic levels, as inflationary pressures impact consumer demand.