JPMorgan Lowers Outlook On American Airlines Group Inc (NASDAQ:AAL)

American Airlines Group Inc (NASDAQ:AAL) was marginally down during the after-hours to $54.13 as JPMorgan Chase revised outlook on the United States’ one of the biggest airlines. The research firm noted that it lowered its estimates on the carrier on the back of increased fuel costs and updated guidance.

Learn what the indicators are telling the analyst about AAL.

Fuel costs and updated guidance

JPMorgan said that it took in note American Airlines Group Inc (NASDAQ:AAL)’s revised guidance, where it trimmed its pretax margins from 13-15% to 12-14%. In addition to this, JPMorgan mentioned that the fuel cost of $1.90 in 2015 will translate into an earnings-per-share of $10.89. The revised EPS estimate is down from the original estimate of $11.81 but is well above the market consensus of $10.55. Meanwhile, the research firm has set $11.89 projection for EPS for the year 2016.

Voicing against Gulf

Meanwhile American Airlines Group Inc (NASDAQ:AAL) has joined the other US carriers to voice its demand to bar the Gulf carriers from trips outside the region. The carriers have submitted request to the Obama administration to consider barring the Gulf carriers from entry into the U.S. if the flights do not make a stop or start in Qatar or United Arab Emirates. Also, the carriers have suggested the Obama government to prevent expansion of Gulf carriers into the U.S.

The protest against the Gulf airlines came as American Airlines Group Inc (NASDAQ:AAL) along with Delta Air Lines, Inc. (NYSE:DAL) and others presented the report to the government. The said report indicated that Gulf carriers are receiving $42 billion in subsidies as well as other benefits from their home countries. The airlines argued that such benefits allow Gulf carriers to offer cheap tickets to flyers to Asia. In view of these factors, American Airlines Group Inc (NASDAQ:AAL) and others are demanding a level playing field as they have been majorly hurt in routes to Asian countries and particularly India.

Scott Sally

Scott Sally

Sally joined the US Markets Daily News Team in April 2011 as a Multimedia Journalist.