American Airlines plans to beef up its corporate sales force
this year in an effort to gain market share, executives said during the
carrier's earnings call. "As we look at the number of contracts we have
relative to our primary competitors, we have fewer," SVP of network
planning Andrew Nocella said. "We're going to close that gap over the next
12 months."
American grew its corporate share in the fourth quarter, as
it had the previous three quarters, president Robert Isom said. The sales team,
however, has not had the necessary "boots on the ground to deal with
corporate contracted revenue," Nocella said. Alison
Taylor, who joined American to lead its global sales team in September,
also will help the carrier make gains, he added.
Echoing the experience of both Delta and United, American
noted a bump in corporate travel volume following the U.S. presidential
election, particularly in the banking, financial, industrial and entertainment
segments, Isom said. Operating revenue increased 1.7 percent year over year
during the fourth quarter to $9.8 billion.
Traffic declined 1.3 percent as American increased capacity
0.4 percent, causing load factor to drop 1.3 percentage points to 81.4 percent.
Yield, however, increased 1.8 percent, and unit revenue was up.
Isom said the domestic pricing environment was stable during
the quarter, and American stands to gain leverage in corporate pricing when it
introduces its Basic
Economy fare next month. The segmentation will weed out the lowest fares
from corporate buyers, who largely have expressed no interest in using the
fares. "As we've talked to corporate customers, they don't want us to
distribute it to them because they don't see it as attractive," SVP of
revenue management Don Casey said.
American also plans to refile for an expanded joint business
agreement with Qantas, a plan rejected
by the U.S. Department of Transportation last year because of competition
concerns. American Airlines executives expect a friendlier reception from the
DOT under President Donald Trump. "There are lots of consumer benefits, so
we're anxious to make our case and get a fair review," Nocella said.
American
reported a net income of $2.7 billion for the full year 2016, compared with a
net income of $7.6 billion in 2015. The 2015 profit included a $3 billion
income tax benefit.