Fuel costs weigh on American Airlines' profit, shares fall

Shares of American Airlines Group Inc fell more than 5% Thursday as sharply higher fuel costs weighed on profits and spooked investors. The carrier reported net profit of $186m, or 39c share, in Q1, down from $340m, or 67c a share, a year ago. Excluding items, American earned 75c a share, 3c above average analyst forecasts. Fuel expenses jumped 25.7% in the quarter. “Higher fuel prices led to a decline in year-over-year earnings, but we are excited about the future,” American Airlines CE Doug Parker said. Rising costs are an ongoing concern for airlines, as high fuel prices and rich bumps in salaries and benefits for pilots, flight attendants and mechanics have swelled operating expenses. This has put a damper on what could have been an otherwise rosy operating environment for American. Robust demand for air travel drove a 5.9% year-over-year increase in quarterly total revenue to a record $10.4b. American said enhancements to its fleet, notably an order of 47 Boeing 787s, will help improve fuel efficiency and lower maintenance costs, saving the carrier money down the line.<br/>