American Airlines CEO: 'I don't think we're ever going to lose money again'

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DALLAS -- American Airlines will be in the black for the long term, CEO Doug Parker said Thursday.

"I don't think we're ever going to lose money again," Parker said during a talk at American's Media and Investor Day here on Thursday. "We have an industry that is going to be profitable in good or bad times. We have an airline that is going to be profitable in good or bad times."

Doug Parker
Doug Parker

Last year, American's net income was $2.6 billion, following a record year of $7.6 billion in 2015.

The U.S. airline industry has transformed since 2001, with mergers drastically reducing the number of major carriers. Today, four airlines (United, American, Delta and Southwest) dominate domestic air travel.

On Thursday, Parker produced a slide showing that between 1978 and 2013, US Airways and American combined to make $1 billion. But since those two carriers merged in 2013, and with the aid of plunging fuel prices, American has earned $19.2 billion in pre-tax profit. 

Parker said that American believes it can make an average of $5 billion per year in pre-tax profit going forward.

The carrier, like its major competitors in the domestic airline industry with the notable exception of Southwest, has diversified its revenue model in recent years by adding fees for services such as checked bags and select seat assignments.

In addition, American has created new fare classes, including the bare-bones Basic Economy (no access to overhead bins, seat assigned at check-in, no flight changes allowed) and Main Cabin Extra (passengers pay extra for seats with more legroom in the coach cabin).

American has also begun offering a Premium Economy cabin for long-haul flights on its widebody fleet. Eventually, 104 aircraft will offer the product, which features extra legroom, a wider seat with more recline and more service offerings than the coach cabin.

The carrier offered few new announcements during Thursday's daylong media briefing, but president Robert Isom did say that Main Cabin Extra will soon be getting an upgrade that will include extra service offerings. The lone detail he provided is that Main Cabin Extra passengers will receive one free drink on their flight. 

In one other vaguely worded announcement, American will soon be offering free messaging on its flights, said Kurt Stache, senior vice president for marketing, loyalty and sales. His comment came one day after Delta announced that all of its passengers on WiFi-enabled flights will be able to send and receive messages for free through iMessage, WhatsApp and Facebook Messenger beginning Oct. 1.

Stache said American will offer more details on free messaging soon.

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