* Adj profit 59 cents a share vs Street view 55 cents
* Combined fuel costs fall, fares up
Jan 28 American Airlines Group Inc, the
world's biggest carrier following a merger with US Airways last
year, reported better-than-expected adjusted profit and revenue
as fares climbed and fuel costs fell, sending its shares up more
than 4 percent.
The carrier, the result of a union of American and US
Airways on Dec. 9, said demand trends were strong, and it
expected revenue per available seat mile - a key measure of
profitability - to grow 2 to 4 percent in the current first
"This is a company that has potential to deliver stronger
financial performance, as they work on implementing a new
reservation system, as they work on all the many complicated
tasks associated with a merger," said Henry Harteveldt, a San
Francisco-based travel industry analyst with Hudson Crossing
American said it planned to improve on the fourth quarter
results in 2014 as it combines operations. Customers can book
flights on both airlines, for instance, and loyalty program
members can earn miles when traveling on either network. The
carrier recently selected a new reservations system.
"It's really early in the merger but we are off to a great
start," Chief Executive Doug Parker said during a conference
call. "We have a lot of work ahead."
American Airlines Group said on Tuesday it had a net loss of
$2 billion, or $8.66 a share, in the fourth quarter, after
charges of $2.4 billion tied to AMR Corp's emergence from
Chapter 11 protection and merger costs.
Still, excluding those charges, combined profit for AMR,
American's former parent company, and US Airways, was $436
million, compared with a year-earlier loss of $42 million.
Adjusted profit was 59 cents a share, higher than the 55 cents a
share expected by analysts surveyed by Reuters.
The merger of American and US Airways was the fourth major
union in the U.S. airline industry since 2008. American
significantly pared costs in bankruptcy, and the merger gave its
biggest unions equity stakes in the new company.
Combined revenue grew 8.7 percent to $9.98 billion, better
than the $9.9 billion expected by analysts. Yield, a measure of
the average fare, rose 5 percent.
Fuel costs, the carrier's biggest expense, fell 1.7 percent,
while operating expenses rose 7 percent on a combined basis.
The results were similar to those of other airlines in the
fourth quarter, which tends to be aided by year-end holiday
travel. Revenue gains and lower fuel costs helped Delta Air
Lines, United Continental and Southwest Airlines post
better-than-expected profits last week
Shares of American Airlines Group were up 4.5 percent at
$31.54 in afternoon trading. Other airlines climbed, too, with
Southwest up about 3 percent at $21.22 and United up 1.8 percent