American Airlines (AAL)

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American Airlines Earnings Nearly Double

Source: Dow Jones News
American Airlines Group Inc. said Friday that its first-quarter earnings nearly doubled as the company continues to benefit from low fuel prices.

However, it added that the strong dollar, competitive capacity growth, and economic softness in Latin America pulled down sales.

American Airlines, like other airlines, has benefited from the sharp drop-off in oil prices. Operating expenses fell 7.1% in the latest quarter to $8.6 billion, primarily because of a 42% drop in fuel expense.

However, the company recognized $311 million in special charges in the quarter, including $223 million in merger-integration related expenses.

In all, American reported a profit of $932 million, or $1.30 a share, up from $480 million, or 65 cents a share, a year earlier. Excluding special charges related to repatriation of money in Venezuela, earnings were $1.73 a share in the latest quarter.

American has significantly reduced capacity in Venezuela and is no longer accepting bolivars as payment. As a result of these negotiations, the company took a $13 million charge for foreign-currency losses.

Revenue fell 1.7% to $9.83 billion.

Analysts polled by Thomson Reuters had called for earnings of $1.71 a share on revenue of $9.83 billion.

American's revenue per available seat mile, a key measure of performance for the airline industry, was down 1.7% from a year earlier.

Rival United Continental reported Thursday that it swung to a profit in the first quarter, as traffic and revenue per seat mile both grew, while Southwest Airlines' earnings more than doubled as customer demand led to a record-high load factor and it continued to benefit from lower fuel prices.

Write to Angela Chen at [e-mail]

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