Shares of American Airlines Group were in a free fall on Tuesday after the company posted an SEC filing that revealed higher-than-expected fuel costs along with the negative impact of Hurricane Florence last month.
The largest U.S. carrier said it had to cancel some 2,100 flights due to the hurricane that battered the Carolinas in mid-September. As a result, its third-quarter revenue was reduced by $55 million, while pretax income was negatively impacted by $50 million. The airline also said its total revenue per available seat mile–a highly watched metric known as TRASM–was reduced by 50 basis points as a result of the storm.
Making matters worse, fuel costs were 6 cents higher than expected in the quarter, with American Airlines paying $2.28 to $2.33 per gallon.
Investors noticed: The company’s stock fell 6.55% today, closing at $33.55 a share, a two-year low.
Despite the storm’s impact, American Airlines said it expects TRASM to be up 2% to 3% percent year-over-year, compared to its previous guidance of 1% to 3%, so the news wasn’t all bad. Still, it’s hard to sugarcoat a major hurricane.
You can read the full filing here.