American Posts Profitable First Quarter
American Airlines parent AMR today reported a first-quarter profit of $81 million on the wings of high load factors and growing passenger revenue.
The carrier posted a loss in the first quarter last year, but managed to score profits in each quarter following, as well as for the fiscal year 2006.
"In spite of significant weather challenges, we continued to build on our momentum by generating a profit in the first quarter," AMR chairman and CEO Gerard Arpey said in a statement. "This is our fourth consecutive profitable quarter and the first time we have generated a profit in the first quarter since 2000."
American said mainline passenger revenue jumped nearly 5 percent in the quarter compared with the same period in 2006, as capacity declined and load factors rose to a record 78.1 percent. "American's first-quarter yield, which represents average fares, increased 3.3 percent compared to the first quarter of 2006, its eighth consecutive quarter of year-over-year yield increases," the carrier said in a statement.
In a research note commenting on American's earnings, Calyon Securities analyst Ray Neidl said, "the forward booking curve for both domestic and international travel looks strong, which will give the airlines the opportunity to further tighten their yield management and probably raise ticket prices. We can see three years of cost-cutting finally taking hold, and management for the first time in years is showing some confidence through at least the summer."
American is the first of the major domestic airlines to release first-quarter earnings, but analysts expect competitors to detail a similar reversal of fortune for the domestic airline industry.