Singapore Airlines on Tuesday posted a record half-year profit reflecting strong travel demand as passenger traffic to the northern part of Asia rebounded after countries fully reopened post the Covid pandemic.
19.10.2023 - 22:57 / skift.com / Robert Isom / Edward Russell / Devon May / Airlines
American Airlines wants investors to see the forest and not the trees when it comes to earnings.
The Fort Worth, Texas-based carrier lagged its peers in the third quarter with an operating profit margin, excluding special items, of just 5.4%. That came despite record revenues of $13.5 billion and an operating profit, excluding special items, of $728 million. With those items, which were related to one-time payments to pilots under the new contract they ratified in August, American’s operating loss was $223 million.
Not exactly the dandy quarter Delta Air Lines and United Airlines had with double-digit profit margins.
That’s why American’s executives, when asked about the headwinds the airline faced, emphasized the many “tailwinds” ahead.
“We do have some headwinds on salaries and benefits,” American Chief Financial Officer Devon May said during the airline’s third-quarter earnings call on Thursday. For one, the airline continues to negotiate a new contract with its flight attendants that it forecasts could add roughly 1 percentage point to non-fuel unit costs next year.
“We have some real nice tailwinds as well into 2024,” May continued.
Those tailwinds include significant growth opportunities in both premium and loyalty revenues. Resuming flights to many higher-yield small- and medium-sized markets where competitors Delta and United have shrunk. International expansion. Returning corporate travelers. And the list goes on.
American, recall, is the largest domestic U.S. airline. It will fly roughly a fifth of all domestic capacity in the country this year, according to Cirium Diio schedules. Demand in the market, however, is described as “steady” by American and its competitors. And by steady, they mean up slightly from 2019 levels.
A steady domestic market where there is a lot of new capacity coming online is why discounters like Frontier Airlines and Spirit Airlines forecast losses in the third quarter. And, that was one reason American’s profits lagged its peers during the quarter. American’s total domestic revenues fell 1.9% year-over-year to $8.6 billion.
International demand, on the other hand, “continues to drive revenue growth,” American CEO Robert Isom said Thursday. International revenues increased 5.4% year-over-year to $3.8 billion in the third quarter. This is a segment that American is eager to expand but has been limited by aircraft delivery delays at both Airbus (the A321XLR) and Boeing (787s). American retired more long-haul aircraft — Airbus A330s, and Boeing 757s and 767s — during the pandemic than its competitors.
Now, those planes are arriving and American is planning growth. The airline will add a second route to Auckland, from Los Angeles, this winter, and several new
Singapore Airlines on Tuesday posted a record half-year profit reflecting strong travel demand as passenger traffic to the northern part of Asia rebounded after countries fully reopened post the Covid pandemic.
Playa Hotels & Resorts N.V. announced its third-quarter earnings last week.
This is getting disturbing.
A Florida mom has alleged in a lawsuit against American Airlines that the air carrier "misplaced" her two kids by putting them in a cold, jail-cell-like room overnight without food, water, blankets, or pillows after their flight got canceled while they were traveling alone.
Tiffany Gomas, the woman behind the viral TikTok video that had everyone talking this summer, is sharing her side of the story.
American Airlines’ multi-year changes to its ticket distribution have had contentious implications for travel agents. The American Society of Travel Advisors in August filed an unfair trade complaint with the U.S. Department of Transportation, accusing American of causing “substantially higher air ticket prices for consumers and frustrated travel management companies.”
Good morning from Skift. It’s Thursday, November 2. Here’s what you need to know about the business of travel today.
This as-told-to essay is based on a conversation with Anna Shepherd, a 24-year-old from Knoxville, Tennessee. It has been edited for length and clarity.
This as-told-to essay is based on a conversation with Niav Konno, a social-media strategist and content creator for small businesses, who lives in Makarska and runs the popular TikTok account @mylifeincroatia . It has been edited for length and clarity.
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