American Airlines Group Inc. (AAL) rebounded in the late trading session on April 20, 2022, after a favorable turn of events took place in the market. Investors started accumulating the stock before the company releases its earnings early morning on April 21.
Thus, after a decline of 0.56% in regular trading, the stock rebounded to add 6.62% in the after-hours session. AAL traded at a price tag of $20.77 in the after-hours as 3.76 million shares exchanged hands.
What is Happening with AAL?
The airline company will be posting its Q1 2022 financial results on April 21, 2022, at 7:30 a.m. CDT. Earlier, the company’s SEC filing had revealed that it has improved its guidance for the quarter as the industry continues to recover from the pandemic.
While the company did raise its guidance for the earnings, investors are currently hopeful for the company as another big airline industry name provided a beat outlook for the year in its latest earnings. UAL posted its latest earnings after the bell on Wednesday which caused investors to take a notice of airline stocks. Despite certain headwinds in Q1, UAL posted an upbeat outlook and 2022 was its first profitable year since the pandemic. Giving hope to the investors, the news caused them to stock up on AAL before it releases earnings.
AAL’s Q1 Expectations
According to an SEC filing, the company revised its guidance for the quarter with revenues declining now by 16% against 2019. Earlier it expected a decline of 17%.
But on the other hand, rising fuel prices and labor costs had its unit cost guidance and fuel price estimates up as well. Thus, amid the Russia-Ukraine conflict, AAL now expects to fuel costs to be $2.80-$2.85 a gallon against a previously anticipated $2.73-$2.78.
Where is the Market Headed?
After being severely beaten down by the pandemic, the airline industry is finally bouncing back to near pre-pandemic levels. Since Covid-19 nearly shut down travel two years ago, airlines and travelers have been slapped with uncertainty upon uncertainty. While the industry is currently at a turning point, there are still many woes encompassing it. The Russian invasion of Ukraine has caused a spike in fuel prices amid the surging inflation.
But this has not declined hope in the passengers, as most are willing to pay higher fares to continue traveling after the restrictions. It is expected that this spring and summer planes would be crowded with fares being noticeably higher.
With hope soaring in the market as the airline industry makes its comeback, AAL stock rebounded in the after hours. Investors are stocking up before the company releases its earnings.