Here’s Why Rothschild & Co Upgraded American Airlines (AAL)

Seven U.S. airlines face antitrust lawsuits alleging they used an AI platform to share fare data and suppress competition, keeping ticket prices high. The suits target American, Delta, United, Southwest, Alaska, Hawaiian, and JetBlue, along with ATPCO and 3Victors. If successful, the airlines could face treble damages and be required to dismantle the pricing system.

Boeing reports over 30 customers have ordered 1,555 737 MAX 10 aircraft. Top customers include United Airlines (167), Ryanair (150), American Airlines (115), Alaska Airlines (105), and Delta Air Lines (100). Orders reflect fleet modernization and growth plans, with deliveries scheduled through 2035.

American Airlines CFO Devon May stated that airfares will remain high even if oil prices fall, citing years of underpriced tickets and the need to offset fuel costs. The airline reported a Q3 loss of $269 million due to a 67.5% surge in fuel expenses. Despite a recent drop in crude oil prices, American's stock surged 6.8%, but fares are not expected to decrease.

Charlotte City Council approved a 10.5-year, $2.1B lease with American Airlines for airport upgrades. Business leaders highlight the deal's role in maintaining Charlotte as a hub. A union criticized the lack of worker protections. American Airlines called it beneficial for taxpayers, while the union cited worker hardships.

Rothschild & Co. upgraded American Airlines (AAL) to buy with a $17.50 price target, citing increased passenger fares and hub investments. The airline faces higher fuel costs but has raised fares and streamlined operations. AAL shares are down 8% YTD but up 11% in the past month. Analysts are divided on the stock.

American Airlines (AAL) stock rose 6.8% after crude oil prices dropped 3% due to geopolitical remarks. Fuel costs significantly impact airlines' operating expenses. AAL reported Q3 revenue of $16.3B, up 19.3%, but fuel expenses rose 67.5% to $4.6B, resulting in a GAAP loss of $269M. The company expects a Q4 adjusted loss of 50 cents to $1.10 per share.