Despite industrial unrest and a court-mandated end to its Northeastern Alliance, American Airlines’ 2023 second quarter has smashed previous records, bringing in an eye-watering $14.1 billion revenue.
Record revenues
Between Q2 2022 and 2023, revenue surged over $500 million, with passenger revenue seeing the best jump at $700,000 – a 6.2% increase. For the yr thus far, revenue expanded further to $24 billion, a 20% increase in comparison with the identical period in 2021.
Interestingly, fuel and tax costs nearly halved, dropping to simply $2.7 billion for the quarter, a far cry from the $4 billion recorded in 2022 – nevertheless, with jet fuel prices plummeting by almost half between April 2022 and 2023, American Airlines has been capable of liberate some liquidity, with surplus fees covering quite a lot of other operating expenses, including maintenance, which grew to $150 million and worker salaries, coming in at $3.6 billion for the quarter.
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Overall, expenses shrunk by $600 million, allowing the carrier to double its income to $2.1 billion. Alongside the improved income, American Airlines’ credit standing was upgraded to a B+ by Fitch, with nearly $15 billion in total liquidity available for the carrier and its shareholders.
American Airlines operated around half one million flights through Q2, averaging a load factor of 86%, barely below 2022’s 503 million and 87% load factor. For the total yr thus far, operations remain roughly on par with 2022, though the load factor grew just over two percentage points to 83.2%.
noted American Airlines CEO Robert Isom.
Q3 and beyond
With contract negotiations underway with American Airlines’ pilots’ union, the carrier may expect increased operational costs through the next yr. Based upon United Airlines’ figures from its deal announced earlier this week, an extra $10 billion may very well be added across the following 4 years – though lowered fuel costs may offset the rise.
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While the Northeastern Alliance is on the outs, American Airlines already has an array of routes able to launch or increase, expanding its presence into Florida – particularly Miami (MIA), and South Asia, with a day by day flight set to operate between Newark (EWR) and Delhi (DEL) through winter.
Expansion through Miami will see the airline operate 380 flights on peak days to 150 destinations during winter, including flights to Portland (PDX) and Sacramento (SMF), set to launch in November and December, respectively. During Q4, the carrier will up its entire seat capability by 10% into the Caribbean and Latin America, operating a complete of two,250 weekly flights to almost 90 destinations.
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