American Airlines chairman and CEO Doug Parker hopes for a better 2020 after a difficult past several months, including the Boeing 737 Max grounding and operational woes related to contract negotiations with American's mechanics.
CFO Derek Kerr estimated that the Max grounding will deal a $540 million hit to income this year. The carrier recently pushed its plans to reintroduce the aircraft back to Jan. 16. The aircraft's return to American's schedule will be a "prudent" and "phased approach," according to president Robert Isom. Five aircraft will return in the first two weeks, 12 over the following two weeks and seven the two weeks after that. The carrier also is talking with Boeing about compensation to "ensure Boeing shareholders bear the cost of Boeing's failures, not American Airlines shareholders," Parker said.
On the operations side, American and its mechanics began mediated talks in September for the first time since April, and American's operations have improved significantly since then, Parker said. Outside of those negotiations, operational improvement will be a focus in the coming year, he said. "We simply will not allow our customers and team members to experience another period like this past summer again."
Additionally, American plans to increase capacity 5 percent in 2020, much of that out of newly acquired gates in Dallas-Fort Worth and Charlotte, Parker said. American already added 100 daily departures at DFW earlier this summer, which the carrier said was "the largest expansion of capacity at any hub in the U.S. in more than a decade."
Passenger revenue increased 4.1 percent year over year in the third quarter to $11 billion. Revenue growth from corporate customers outpaced overall system revenue growth, which "was a great result given our operational challenges," Isom said. Traffic increased 4.9 percent as capacity rose 1 percent, pushing load factor up 3.2 percentage points to 85.6 percent. Yield declined 0.7 percent. American reported a net income of $425 million in the third quarter, up from $372 million in the third quarter of 2018.
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