AA Profit Slumps 1 QTR...Not the only one. SWA..

American Airlines’ first quarter net profit dropped by two-thirds to USD$234 million as fuel costs rose by over 37 percent.

The Q1 net contrasts with 2016’s $700 million profit as pre-tax income plunged 67.4 percent to $365 million in the quarter to end March.
Operating expenses rose 11.4 percent to just over $9 billion, with mainline fuel costs increasing $373 million and staff costs up $173 million. Revenue edged up 2 percent to $9.62 billion.

American carried 46.36 million passengers in the quarter, a 1.2 percent dip from the previous year period. RPM (revenue passenger miles) traffic fell 1.5 percent on an ASM (available seat miles) capacity drop of 1.1 percent. The resulting load factor was 0.4 percentage points down at 79.2 percent.

On a more positive note, passenger yield was up 2.4 percent at 16 cents, and PRASM (passenger revenue per ASM) rose 2 percent.

The Fort Worth-based airline said it has delayed delivery of its order for 22 Airbus A350s by up to two years “to provide widebody capacity flexibility”. It also moved delivery of two Boeing 787-9 aircraft from 2018 to 2019.


Southwest Airlines announced net income for the first quarter of USD$351 million, a 31.6 percent drop from the previous year.

Operating income was $658 million, down from $944 million in 1Q16.
Operating revenue for the quarter to end March edged up 1.2 percent to $4.88 billion, but costs rose at a faster clip, 8.8 percent, to $4.22 billion.
Fuel costs were up 8.2 percent to $922 million, but the biggest percentage cost increase came from salaries, wages, and benefits at $1.73 billion, a 12.6 percent jump. New contracts agreed with the airline’s pilot and flight attendant groups last year contributed to the higher staff costs.

“Our first quarter unit cost inflation was driven primarily by higher fuel costs and pay increases from amended union contracts,” chief executive Gary Kelly said. “Our cost inflation is expected to abate dramatically in second half 2017 to end this year with fourth quarter unit costs in line with year-ago levels, excluding fuel and oil, special items, and profit-sharing,” he added.