American Airlines Q2 Profit Down 44 Pct

July 22, 2016

American Airlines' second quarter profit dropped 44 percent, hurt by a big provision for income tax.

American's total operating costs fell 3.3 percent to $8.61 billion in the second quarter, with fuel costs declining 20 percent.

Net income was 44 percent down at USD$950 million as provisions for income tax surged to USD$543 million from USD$15 million.

Total operating revenue declined 4.3 percent to USD$10.36 billion in the quarter ended June 30.

Airline stocks have fallen in recent months amid growing investor concern that carriers will continue to add flights and push down prices despite insufficient demand, and that rebounding oil prices will add to their fuel costs.

Economic slowdown abroad pose an even greater risk to revenue, with reluctance to buy tickets on US airlines to visit the United States as the dollar rises in value against other currencies.

(Reuters)