Shares of American Airlines Group Inc. (AAL) experienced a 0.5% decline in premarket trading on Thursday, reaching a three-year low. Despite surpassing expectations for adjusted profits in the third quarter, the air carrier fell short on revenue and load factor.

Declining Financial Performance

The company reported a net loss of $545 million, equivalent to 83 cents per share, compared to a net income of $483 million, or 69 cents per share, in the same period last year. Adjusted earnings per share of 38 cents surpassed the FactSet consensus of 25 cents. However, revenue only grew by 0.1% to a record $13.48 billion, slightly below the expected $13.51 billion according to FactSet.

Factors Contributing to Revenue Growth

American Airlines cited a "resilient demand environment" and record credit card and travel rewards program revenue as contributing factors to their overall revenue growth. Despite this, the load factor dropped to 84.0% from 85.3%, missing the factset consensus of 85.3%. The increase in capacity by 6.9% to 73.29 billion available seat miles, coupled with a 5.2% rise in traffic to 61.56 billion revenue passenger miles, resulted in a decrease in load factor.

A Challenging Market Environment

Over the past three months through Wednesday, American Airlines' stock has fallen by 38.9%, while the U.S. Global Jets ETF (JETS) has experienced a drop of 29.6%. In comparison, the S&P 500 (SPX) has only shed 5.5%. These figures highlight the challenging market environment that airlines are currently facing.

It remains to be seen how American Airlines will navigate these difficult times and work towards improving their financial performance moving forward.

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