American Airlines reports strong Q4By DAVID KOENIG
the associated press | January 29,2014
FILE- In this Tuesday, Aug. 13, 2013, file photo, an American Airlines plane and a US Airways plane are parked at Washington's Ronald Reagan National Airport in Washington.American Airlines reports quarterly earnings on Tuesday, Jan. 28, 2014. (AP Photo/Susan Walsh, File)DALLAS — As American Airlines flies into its first year after merging with US Airways, fares are up, fuel costs are down, and the company is beating Wall Street’s profit predictions.
In the past week, American, United, Delta and Southwest all reported fourth-quarter results that beat analysts’ forecasts for earnings and revenue. The major airlines imposed only two broad fare increases over the past year, according to fare watchers, but they have wrung more money from passengers with other tactics.
One is by raising more money from fees on services such as checking bags. Another is limiting the supply of seats so that the airlines can sell more tickets without resorting to sales. When they do add seats, it’s often on international routes where demand is strongest.
American and US Airways reaped the benefits. Revenue in the last three months of 2013 climbed 9 percent due partly to a 5 percent increase in the amount that passengers paid for every mile they flew.
Company officials predicted that revenue for every seat flown one mile — a closely watched measure in the airline business — would rise by between 2 percent and 4 percent in the first quarter compared with a year ago. They forecast that fuel prices would fall slightly as the year goes on.
“The industry is doing really well, and (American and US Airways) start at a strong place,” Raymond James airline analyst Savanthi Syth said in an interview.
American Airlines Group Inc., now the world’s biggest airline operator, reported a $2 billion loss for the fourth quarter because of $2.4 billion in special charges, mostly related to American’s bankruptcy reorganization and merger with US Airways. Without those one-time items, the airlines would have earned a combined profit of $436 million, or 59 cents per share. Analysts, who usually exclude items, expected 55 cents per share.
Combined revenue was $9.98 billion, beatings analysts’ forecast by about $90 million.
American’s shares rose $1.59, or 5.3 percent, to $31.77 in afternoon trading, and the Fort Worth-based company led a broad rally in U.S. airline stocks.
CEO Doug Parker vowed Tuesday to make American “the greatest airline in the world.” But airline mergers are never easy, and Parker must combine two separate workforces, fleets and technology systems without causing disruptions for passengers. United has struggled to do that since combining with Continental in 2010.
“The biggest challenge,” Parker told reporters, “is definitely integration and making sure that we go do what we set out to do.”
Follow David Koenig at http://www.twitter.com/airlinewriterMORE IN National / World BusinessIt may seem like a constant reminder but workplace safety can’t be overemphasized. Full Story
- Most Popular
- Most Emailed
- RICHARD'S POOR ALMANACK: On this day in 1720, 'Calico Jack' Rackham, Caribbean pirate and early feminist, known for recruiting women to his crew and for fabric decorating skills after creating 'Jolly Roger' flag, is captured by the British Royal Navy.
- RICHARD'S POOR ALMANACK: On this day in 1307, King Phillip the Fair of France orders hundreds of Knights Templar rounded up and arrested, charged with heresy, tortured until they confess; on this day in 1917, thousands see miracle of Our Lady of Fatima.
- TOMORROW'S HEADLINES TODAY: Vermont has a new state Supreme Court Justice; city hospital says it can save plenty by upgrading its lights and trucking in natural gas; Springfield has a new town manager, former West Rutland guy, Tom Yennerall.
- TOMORROW'S HEADLINES TODAY: Solarfest likely to be on hold until at least 2016, Great Dane involved in theft of an $89,000 shotgun leads police to the thieves, PSB will not reopen VGS pipeline case, prosecutors want evidence in body-packing drug case.
- RICHARD'S POOR ALMANACK: On this day in 1871, After long summer drought comes simultaneous devastating upper Midwest wildfires; Chicago city center in ruins; in 1967, after brief firefight, Ernesto 'Che' Guevara captured alive in Bolivian jungle camp.
- TOMORROW'S HEADLINES TODAY: City aldermen discuss future of recreation department facilities, three bears killed in interstate crash, town school principal rewards students' good reading habits, fight at city jail sends a man to hospital.