American Airlines Reports Record Profit After Merger
In its first quarter after merging, the combined American Airlines and US Airways reported record profits, despite brutal winter weather.
The new American Airlines announced a net profit of $402 million. CEO Doug Parker told investors the amount totals more money than American airlines has ever earned in the period, and marks a huge improvement from last year.
“US Airways and American combined earned only $62 million on that same basis [in the first quarter of 2013], so this $402 million is an increase of 548 percent,” Parker said.
American Airlines was coming out of bankruptcy last year, and the merger was a key component of that process. Still, this year’s earnings beat projections by 6 cents a share, despite more than 7,500 flight cancelations due to winter weather, which the airline reports hurt profit by $60 million. The $402 million figure also excludes one-time earnings from selling landing slots at airports in Washington, D.C. and New York—a concession to the U.S. Justice Department for the merger.
Parker says the trickiest part of assimilating into one airline, merging the two reservation systems, will not take place until next year.