American Airlines reports operational turnaround

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American Airlines reports operational turnaround

American Airlines recaptured corporate business share during the fourth quarter, in which it reported “significant improvement” in its operations, executives said in the carrier’s earnings call Thursday.

Following a summer of heavy delays and cancellations amid storms, labor disputes and the grounding of Boeing 737 Max planes, American reported “record results” in the fourth quarter in terms of on-time performance and completion factor for its combined mainline and regional operations.

American Airlines president Robert Isom said that improvement was a factor in “picking up share gaps” in corporate business, which he said was “strong” during the quarter.

“Throughout the spring and summer, reliability and customer service suffered because of exceptionally high [numbers of] aircraft out of service,” Isom said. “That is not the case today. Since September, start-of-the-day aircraft out of service has steadily improved, reaching best-ever levels in December and January to date.”

The Max’s return remains a question mark for American. Although earlier this month American had set June 4 as the return date, Boeing since has pushed back its own projection for approval, and American is reassessing its timeline, potentially moving it to “late summer or early fall,” CEO Doug Parker said.

American also had planned to take delivery of 26 additional Max aircraft by the end of this year. Boeing has told American that 13 of those aircraft are waiting in storage, and American expects most of the rest to be delivered by the end of the year, Isom said.

American’s fourth-quarter passenger revenue increased 3.9% year over year to $10.3 billion. Domestic revenue was up 4.4% to $7.8 billion as domestic capacity increased 4.7% and domestic traffic increased 6.1%. Yield on domestic routes, however, was down 1.6%.

International passenger revenue increased 2.2 % to $2.5 billion in the fourth quarter, and revenue was up in all regions with the exception of transpacific routes. Isom said American does not expect its revenue on Latin America routes, which was up 2.6% in the fourth quarter, to be affected when it ends codesharing with Latam at the end of the month.

“American remains the leading carrier and largest carrier between the U.S. and Latin America, and the best partner for future relationships,” Isom said. “We feel very good about our position in this important region and expect only to grow on our own and with partners in the coming years.”

American reported net income of $414 million for the quarter, up from $325 million in the fourth quarter of 2018. For the full year, net income was up 19.4% to $1.7 billion.
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Source: Business Travel News

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