American Airlines achieved very good sales this summer. However, costs skyrocketed not only because of fuel but also because of new contracts with pilots who demanded significant increases. They got bounties that would have cost about $980 million.
The loss for the quarter would be $545 million. It’s the opposite for its two main companies, Delta and United, which have made a lot of money.
Specialists criticize American for opening new routes
American created too many new destinations this summer, which isn’t always profitable because it takes time to get them out there. Moreover, Robert Isom, the general manager, indicated: “there are things we should have done differently this summer. We will focus on areas where we can make money.”
During the same period last year, while some effects of Covid persisted, American earned $483 million.
Among the good news
The American AAdvantage program is doing well.
American has a record number of co-branded card sign-ups and AAdvantage miles sold to partners are growing faster than airline capacity
Direct sales are growing
American would have managed to sell most trips directly. They emphasize that 80% of bookings came from their own channels (AA.com, reservations) and sales of New Distribution Capability agencies, “up 11 points” compared to the previous year. But since total revenue isn’t really increasing significantly, the move to direct could simply be explained by a drop in other sales
Expand and improve the first class
Robert Isom said the company was reconfiguring planes for more “first-class” products. The airline announced plans to reconfigure Boeing 777-300ER aircraft with more premium seats, and the new Boeing 787-9 and A321XLR are expected to feature premium seats. However, he said first class was not business class.
As a reminder, American Airlines is negotiating with manufacturers to purchase 100 aircraft (737 Max or A320).