Flying in moolah
“I don’t think we’ll ever lose money again…Those days are gone” said Mr. Parker, “Instead, American should be able to earn $3 billion pretax in bad times, $5 billion ordinarily and up to $7 billion in good times”.
Whoa, whether we get bumped (or dragged..) off or luggage goes visiting on its own, American Airlines sure has it figured out on how to nickel, dime and dollar us into perpetuity.
The airline recorded a pre-tax profit of $1.0 billion and a net profit of $624 million on a total revenue of $10.9 billion (up 2.7%) for the third-quarter 2017. In airline industry jargon it is a 1.1 percent increase in total revenue per available seat mile (TRASM); translation — they were able to pack more people into the planes. We are sure ‘Basic Economy’ (no bags allowed, learn yoga to fit into the seat, no toilet usage…just kidding) helped, also as did ‘Premium Economy’ (what used to be the economy and how you flew).
All the revenue components, Mainline passenger (up 3%), Regional passenger (up 1%) and Cargo (up 17%) performed well. Other solid numbers like Revenue Passenger miles (60.4 Billion — up 1%), Share buyback of $362 million and Dividend of $41 million didn’t help the shareholder sentiment today. Even an EPS of $1.42 per diluted share excluding net special items which beat the $1.40 analyst estimate wasn’t enough for the shareholders. We guess the investors were more focused on the rising operating expense (up 5.3%). If we knew which factor the shareholders will look at any given time, we would be trading in the market and not writing this column ;-)
