American Airlines posts record 3Q profit

AP News
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Posted: Oct 23, 2014 9:10 AM
American Airlines posts record 3Q profit

DALLAS (AP) — Summer vacations were good for American Airlines.

With passengers paying a record amount for every mile and most seats filled, American earned an all-time best $942 million in the June-through-September third quarter.

CEO Doug Parker predicted more records for fourth-quarter and full-year profits.

American and other U.S. airlines are soaring as mergers have helped them limit the number of flights, keeping fares higher, and falling oil prices have given them relief from their largest expense, jet fuel.

The net income reported by American Airlines Group Inc. was an 87 percent increase over the $505 million earned by American and US Airways a year earlier, when they were still separate companies. They merged last December.

Excluding special items, many related to the merger, the profit was $1.2 billion, or $1.66 per share. Analysts expected $1.63 per share.

Revenue rose 4.4 percent to $11.14 billion, matching the forecast of analysts in a FactSet survey.

The amount that passengers paid to fly each mile, called yield in the airline business, was a record, reflecting strong demand and average fares.

Not counting regional flights, the average plane was 83.9 percent full, down a bit from 85.6 percent a year earlier because the company added more seats.

American, US Airways and their regional affiliates paid $2.98 per gallon for fuel, a nickel less than a year ago. Fuel remained the company's largest expense, at $2.83 billion, down 1.3 percent. But labor costs rose 4.8 percent to $2.14 billion.

American and US Airways expect to operate separately until sometime next year, when the US Airways brand will go away. The combined company is the world's largest airline operator by passenger traffic.

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