American Airlines makes first profit without government aid since pandemic began
TRIBUNE CONTENT AGENCY 8:27 AM ET 7/21/2022
Symbol Last Price Change | AAL | 15.21 | 0 (0%) | | DAL | 32.85 | 0 (0%) | | LUV | 41.5 | 0 (0%) | | QUOTES AS OF 04:15:00 PM ET 07/20/2022 |
Fort Worth-based American Airlines(AAL) is profitable for the first time in more than two years without government help as fuller planes and higher-ticket prices overcame expensive fuel and labor costs.
American Airlines (AAL) reported a $476 million profit on record $13.4 billion in sales during the second quarter. It’s the first time the company has made a profit without government aid since before the COVID-19 recession began, a period in which it totaled more than $12.5 billion in losses.
“Making sure American could take advantage of the continued recovery has been our collective focus, and the second quarter is evidence that our actions are producing positive results,” American Airlines(AAL) CEO Robert Isom said in a letter to employees. “There is no better validation of this than reporting our first quarterly profit since the start of the pandemic.”
American was able to pull in record sales despite flying 8.5% less than it did in 2019 as the industry struggles to return to pre-pandemic levels even though consumers have shown a willingness to pay elevated prices to travel.
Airlines have had to reduce flights with a shortage of pilots at regional carriers and carriers have scrambled to hire tens of thousands of workers to try to fill positions that were cut during the COVID-19 pandemic, despite more than $50 billion in government aid including more than $12 billion in grants for American Airlines(AAL).
While several airlines cut back on capacity, American kept its schedule 25% larger than its next-largest competitor, Delta Air Lines(DAL). American carried more than 53 million passengers on more than 500,000 flights in the quarter.
American says its on-time arrival rate from April to June was better than it was during the same period in 2019. Although, the summer of 2019 was marred by infighting with union mechanics and the grounding of the Boeing 737 Max limited capacity.
Isom has repeatedly said that the airline is properly staffed to handle the summer travel surge.
“As we look to the rest of the year, we have taken proactive steps to build additional buffer into our schedule and will continue to limit capacity to the resources we have and the operating conditions we face,” Isom said in the letter.
American’s improved financial results come a day after competitor United Airlines, based in Chicago, reported $329 million in profits for the second quarter, also its first profitable quarter without government aid since 2019. Atlanta-based Delta Air Lines(DAL) posted a $735 million profit last week, while Dallas-based Southwest Airlines(LUV) reports earnings next week. |
