The numbers may look uninspiring, but American Airlines seems to have finally found a message Wall Street believes.
Wall Street listened and the market appears to be rewarding that discipline. Shares rose after the report as American raised its full-year profit outlook, and investors appeared to give management credit for focusing on reliability, premium revenue, and measured capacity. As View From The Wing noted, the real story isn’t that American made money (it didn’t) but that management finally articulated a coherent path forward that investors found credible.
But I do view the investor class as fickle and opportunistic. How much of the stock gain was due to short selling? Why was United’s stock pummeled when its profit (not loss!) exceeded expectations but AA’s stock surged despite posting a loss? I’ll answer my own question: the aviation industry is all about expectations. AA was expected to do even worse while United was expected to do even better. Even so, I still find it somewhat bemusing.
A great solo travel tip spotted this week on Live and Let's Fly.
