Anyone actually see their report? It's obvious that RASM gains are no longer going gangbusters. This should be compensated for by declining fuel prices, but we all know that poor oil fundamentals don't necessarily translate to lower oil prices (although oil prices are down yoy). I'm naturally cautious here because of the craziness of the market the past few months.
The 1% down prasm was midpoint on their guidance (flat to down 2%). ASM's increased enough so total revenue yoy was up ... in both April and May. So far it shouldn't be a problem hitting analysts' revenue estimates.
The surprising thing was the BofA/ML analyst, Engel. I don't know what kind of track record he has. Here is quote from his downgrade of LCC ... anyone want to translate? Is he saying he thinks AMR is going to be a drag? Or, is he saying LCC's EBITAR should be lower since AMR's is lagging?
"Analyst Glenn Engel thinks expectations for pre-merger Ebitdar are too high. He noted that AMR's monthly Ebitar is tracking far below guidance and projections for standalone performance are likely too optimistic.
I still have LCC having record pre-tax earnings, if not after tax as well.