AA reports record quarterly and yearly profit

[WorldTraveler]

not sure why someone hasn't posted this already but AA continued the string of strong profitability for the US airline industry with a $1.1B quarterly profit before specials and a $4.2B annual profit on the same basis.

http://finance.yahoo.com/news/american-airlines-group-reports-record-120000482.html


AA noted its Venezuela currency situation for which they took some impairments but still have more than $650 Million in Venezuela that it hopes to be able to repatriate but may not be able to.

AA also recorded several hundred million dollars in merger related charges.

AA's cost control was good

AA's Achilles heel in revenue was Latin America where RASM was down by 11%, the 2nd quarter of double digit RASM decline. Latin America was the prime reason why AA's system RASM growth was negative.

In terms of bottom line results, all 3 of the big 3 US airlines reported fairly comparable results with each having specific strengths and weaknesses.

overall, a strong turnaround for AA.

 

[jcw]

I would point everyone to compare how this thread was titled vs the one on the DL board and how the DL profits were explained vs AA's

 

[commavia]

Just as predicted.
 
AA is back as a strong and viable competitor.
 
The days of one U.S. network carrier having any asymmetric financial, operational, network or strategic competitive advantage are O-V-E-R.

 

[Bogey]

And where is the TWU. And what are they doing to get our piece of this 4B dollar pie?

 

[WorldTraveler]

I don't think anyone predicted that there would be one dominant carrier and a bunch of other weaklings.

However, there are clear strengths and vulnerabilities at each airline and there are different track records for success on different types of initiatives.

as was expected, AA is getting a nice bonus in not having hedge losses but has the Venezuela currency issue and weakness in Latin America which is their "cross to bear."

AA's costs for the most recent quarter also do not reflect most of the snapbacks in labor costs that are coming with the new CBAs.

however, on the larger theme, there will be four very large but highly competitive and relatively comparable domestic airlines and three very large US int'l carriers - although in both arenas, each will have strengths and weaknesses.

hats off to the AA people for what they have accomplished so far and all the best as the merger continues and AA people unlike all of the potential of the merger.

 

[AirLUVer]

I think you need to add to your narrative that it is a 11% decline yoy, not from last quarter. That negative decline should diminish greatly in the first or second quarter I believe, since it was then that AA pulled the Venezuela flying. Of which AA had more than any other US carrier.

 

[JetguyCLT]

How much of that Profit will be shared with US CWA/IBT represented employees??

 

[WorldTraveler]

airline financials are almost always quoted on a year to year basis but it is fair to note that.

also, AA execs specifically said that it will likely be the 3rd quarter before AA's RASM performance begins to improve relative to its peers.

 

[MetalMover]

hats off to the AA people for what they have accomplished so far and all the best as the merger continues and AA people unlike all of the potential of the merger.

 
Yes, hats off to AA people for their sacrifices as well. Low fuel costs was a major factor indeed...But let's not forget the concessions employees have endured and still do. 
All more the reason why ALL EMPLOYEES SHOULD RECEIVE THE 4%.

 

[AANOTOK]

There is absolutely no doubt that each and every employee contributed to the financial turnaround that AA has made. The folks of both US and AA have sacrificed tremendously to help get this airline back on a solid foundation. That is why (imo) it is dumbfounding, mind boggling (use whatever narrative you want) that (1) Mr. Parker will not allow ALL employees to share in the rewards (4%) without any strings attached, and (2) neither the IAM or militant Lombardo led (sarcasm) TWU have done nothing more than sending an apologetic letter about why his members are left out.
Again, in my opinion, for a CEO who stresses how much he wants labor/management harmony, and two unions who claim a combination of the two "Association" will be much better for the members, I see nothing but "EPIC FAIL" on both fronts. But having said that, if I'm Doug Parker, I'm laughing all the way to the bank!!

 

[NYer]

There is absolutely no doubt that each and every employee contributed to the financial turnaround that AA has made. The folks of both US and AA have sacrificed tremendously to help get this airline back on a solid foundation. That is why (imo) it is dumbfounding, mind boggling (use whatever narrative you want) that (1) Mr. Parker will not allow ALL employees to share in the rewards (4%) without any strings attached, and (2) neither the IAM or militant Lombardo led (sarcasm) TWU have done nothing more than sending an apologetic letter about why his members are left out.
Again, in my opinion, for a CEO who stresses how much he wants labor/management harmony, and two unions who claim a combination of the two "Association" will be much better for the members, I see nothing but "EPIC FAIL" on both fronts. But having said that, if I'm Doug Parker, I'm laughing all the way to the bank!!

 
I'm sure they're very eager to give us something despite no progress in preparing for negotiations, lawsuits against the Association and moving that process forward and lawsuits making allegations of serious maintenance lapses.

 

[IberiaMAL]

I'd Like to see a Brief blurb about how well the hubs are doing. In particular Charlotte, Philly & DC.

Someone on another forum mentioned that when Kirby was in town at the training center in CLT on the 14th, that he said Charlotte was American's most profitable hub. I'm curious as to if there was any spin to that.

 

[Bogey]

Let's not forget the time and money the TWU is spending trying to punish the former boards of locals 541 and 542. They should be focused and using resources on moving forward.
Just let those people vote and move on. They are screwing everyone.

 

[WorldTraveler]

There were a few comments on the earnings call about RASM pressure from competitive growth including low and ultra low fare carriers with DFW, ORD, DCA, PHL, and S. Florida noted.

No comment regarding CLT that I got other than that the 787 won't go there.

 

[commavia]

No question that other carriers - including one of AA's network airline rivals in particular (cough, cough) - continue/s to fall all over themselves adding (dumping) capacity into some of AA's largest markets because, as already discussed numerous times before, AA's hubs also happen to represent some of the largest and richest markets in the U.S. 
 
Nonetheless, AA's structural cost advantages should mean that AA is more than capable of responding to this competitive capacity - particularly if/when the company continues to recognize the synergies of the merger.