American Airlines rides travel boom to $1.3 billion profit in the second quarter as fuel prices drop
American Airlines reported a $1.3 billion profit for the second quarter, continuing the run of strong results from the nation's airlines
DALLAS — American Airlines reported a $1.34 billion profit for the second quarter, boosted by strong ticket sales and a huge drop in the price of jet fuel, and the airline raised its profit expectations for the year.
Revenue rose 5% to a quarterly record of $14.06 billion. International travel in particular is picking up, and that is helping American, United Airlines and Delta Air Lines.
Thanks to lower fuel prices, the carrier's spending at the pump plunged 32%, saving the American about $1.3 billion compared with a year earlier.
That was partly offset, however, by labor costs that are rising and will soon increase much more rapidly.
Analysts were disappointed in American's forecast that third-quarter revenue per seat will decline as the airline adds more flights, which could renew concern about consumer demand.
American's shares fell 6.2% in morning trading.
American recently agreed with union negotiators on a new labor contract that would raise pilot pay by more than 41% over four years. The two sides are now renegotiating after pilots at United got a better deal.
CEO Robert Isom said American will match the United contract terms.
The Allied Pilots Association, which represents crews at American, valued the previous deal at $8.3 billion over four years, and improving it to match United will likely bring its cost to about $9.5 billion.
Separately, American’s flight attendants want immediate raises of 35% followed by annual raises of 6%.
“Over time we are going to run a profitable business,” Isom said on a call with analysts and reporters. “Ultimately it will take more revenue to
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