American Airlines Significantly Boosts Its Profits

American Airlines has boosted its profitability by almost nine times from quarter two to quarter three. The US…

American Airlines Significantly Boosts Its Profits

American Airlines has boosted its profitability by almost nine times from quarter two to quarter three. The US big three carrier posted a profit of $169 million from July to September. This compares to a profit of $19 million for Q2 and a loss of $2.4 billion during Q3 last year.

American Airlines posted a profit of $169 billion for the three months from July to September. Photo: Getty Images

All in all, 2021 seems to have been a good year for American Airlines so far, despite the impact of the Delta variant in the United States. The airline returned to profitability earlier this year, has its Boeing 737 MAX aircraft back in service and has largely restored flight schedules. All of this is shown in the carrier’s financial results.

$169 million profit

For the three months from July to September, American Airlines recorded a profit of $169 million. The airline clocked an operating revenue of $8.969 billion, with $8.0 billion coming from passengers. Of course, running an airline isn’t cheap, which explains why the airline’s profit is only 2% of the revenue.

The airline’s total operating expenses came in at $8.374 billion, giving an operating profit of $595 million. The airline’s single most significant expense was its staff, which clocked in at $3 billion. Next up was aircraft fuel, which American Airlines spent $1.952 billion on during the three months. Altogether, the costs for maintenance, rent (aircraft and other), and landing fees came to just $1.6 billion.

American Airlines, Profit, Profitable Airline
American Airlines spent around three billion dollars on staff for the quarter. Photo: American Airlines

Digging into the numbers

Compared to a year ago, American Airlines is carrying substantially more passengers, which is a significant driver behind its increased profitability. Out of 61 billion available seat miles operated by the airline during the quarter, 48 billion were occupied by revenue-generating passengers, giving a load factor of 78.7%. A year ago, the load factor was almost 20% lower at 58.9%.

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The available seat miles increased by 98.6%. Despite this, the airline’s fuel consumption only increased by 88.5%. This year the airline used 941 million gallons compared to 499 million gallons last year. The airline’s fuel bill increased by over 200% because the price of jet fuel has risen sharply in the past year. A year ago, while flight numbers were relatively suppressed, fuel was pretty cheap, with an average price of $1.23 per gallon. This year that had increased by 69.2% to $2.07 per gallon.

American Airlines, Profit, Profitable Airline
The cost of fueling the aircraft went up alongside the amount of fuel needed. Photo: American Airlines

The airline also paid off the debt secured against 20 of its Boeing 777-200 aircraft during the quarter. Commenting on the figures, American Airlines’ Chairman and CEO, Doug Parker, said,

“While the rise of the COVID-19 delta variant delayed some of our revenue recovery, it has not stopped our progress. We are incredibly proud of the team’s hard work to operate a great airline, and with the network, cost and fleet simplification actions we have taken, we’re confident American is well-positioned as the recovery takes hold.”

What do you make of American Airlines’ Q3 results? What were you expecting from the airline? Let us know what you think and why in the comments!

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Alaska Airlines Returns To Profitability Following Tough Pandemic

The Alaska Air Group has managed to overcome some of the major complications of the pandemic according to…

Alaska Airlines Returns To Profitability Following Tough Pandemic

The Alaska Air Group has managed to overcome some of the major complications of the pandemic according to its third quarter 2021 financial results. The Seattle-based company, which owns Alaska Airlines and Horizon Air, has reported positive numbers compared with the same period in 2020.

After a challenging year and a half, the airline group’s numbers are out of the red. Photo: Getty Images

Healthier numbers

Alaska Air Group’s net income for Q3 2021 is $194 million, or $1.53 per share. In comparison, the business reported a net loss of $431 million, or $3.49 per share in the same period last year.

The group’s reported Q3 2021 net income, excluding “special items and mark-to-market fuel hedge accounting adjustments,” is $187 million, or $1.47 per share. This number is against an adjusted net loss of $399 million or $3.23 per share in Q3 2020. Alaska Air adds that the quarter’s adjusted results “compare to the First Call analyst consensus estimate of $1.30 per share.”

Alaska Airbus A321neo
The Alaska Air Group reported an adjusted Q3 2021 pre-tax margin of 12%. Photo: Getty Images

Thrilled leadership

The company notes that the figures of the results signify great progress for the market. It adds that since the beginning of the global health crisis, the firm has targeted careful redevelopment. The current numbers support this overall mission.

“We are thrilled to return to profitability this quarter, leading the industry with a 12% pretax profit margin,” said Alaska Air Group CEO Ben Minicucci, in the earning report.

“Thanks to each one of our employees for running our operation and showing remarkable care for our guests, and credit to the leadership team for laying out a measured plan and executing it with discipline. We’re all feeling the momentum and look forward to building on our strong foundation for growth in 2022 and beyond.”

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Alaska Getty
The airline isn’t the only carrier to share positive figures this quarter. Photo: Getty Images

Improved conditions

Altogether, passenger numbers have been on the right path in the United States for much of 2021. Airports across the country have been seeing between approximately one and two million travelers pass through in the last quarter, which is over double the number of fliers in the summer months last year.

Alaska Airlines has been taking advantage of the momentum. For instance, the airline just announced new routes from Boise, Idaho, which are set to start next summer. This move follows the recent revelation of a new route to Utah from Anchorage.

With the United States relaxing travel restrictions from across the pond next month, Alaska Airlines will be looking to boost its revenue even further. This month, it shared that it is expanding its network via a codeshare agreement with Iberia Airlines.

Passenger activity hasn’t hit 2019 levels yet. However, the Alaska Air Group will be glad that the figures are heading in the right direction.

What are your thoughts about the Alaska Air Group’s third quarter results? What do you make of the overall situation in the industry in the current climate? Let us know what you think of the market’s prospects in the commoner section.

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