American sees profit increase despite MAX issues

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January 24, 2020
American proft
Photo: American Airlines

American Airlines ended the 2019 financial year with its strongest ever operational fourth quarter despite the cancellation of 10,000 flights due to the Boeing 737 MAX groundings.

The airline said a significant improvement in operational performance had seen its best-ever effort for both the holiday peak travel period and the quarter.

This included record results for combined mainline and regional on-time departures, on-time arrivals and the completion factor.

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The $US414 million net profit for the quarter contributed to an annual net income of $US1.68 billion, up from $US1.41 billion the year before.

The US carrier said continued strength in passenger demand and a record passenger load factor drove a 3.4 percent year-over-year increase in fourth-quarter revenue to $US11.3 billion.

“While our results for the quarter reflect this progress, we know there is more work to be done,“ American chief executive Doug Parker said in the results announcement.

“Looking to 2020, we are focused on three key areas. First, we will continue to deliver operational excellence and build on our strong fourth-quarter results.

“Our team has done a tremendous job, and we will keep driving improvement in key operational metrics in the year ahead.

“Second, we will deliver those results while growing where we have a competitive advantage in our most profitable hubs.

“And third, these initiatives combined with our capital plan will enable us to drive significant free cash flow in 2020 and beyond.”

American has joined United and Southwest in removing Boeing 737 Max flying from its schedule until at least June.

Its fleet includes 24 MAX aircraft with 76 on order and it said it would continue to assess the timeline for returning the plane to service.

Boeing has also moved its estimate for a MAX return to service to mid-2020 after deciding to support additional simulator training for pilots flying the plane.

New Boeing chief executive David Calhoun said in a media call this week that the recommendation was always going to “elongate” the return to service.

He said a software issue that had arisen recently only had a small impact on the plane’s return.

However, he expected production to start months before a return to service.

“I’m not going to give you a precise date but it will and the supply chain will be reinvigorated before that,’’ he told reporters.