American Airlines 4Q results beat expectations

Published on NewsOK Modified: January 28, 2014 at 2:37 pm •  Published: January 28, 2014
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DALLAS (AP) — As American Airlines flies into its first year after merging with US Airways, fares are up, fuel costs are down, and the company is beating Wall Street's profit predictions.

In the past week, American, United, Delta and Southwest all reported fourth-quarter results that beat analysts' forecasts for earnings and revenue. The major airlines imposed only two broad fare increases over the past year, according to fare watchers, but they have wrung more money from passengers with other tactics.

One is by raising more money from fees on services such as checking bags. Another is limiting the supply of seats so that the airlines can sell more tickets without resorting to sales. When they do add seats, it's often on international routes where demand is strongest.

American and US Airways reaped the benefits. Revenue in the last three months of 2013 climbed 9 percent due partly to a 5 percent increase in the amount that passengers paid for every mile they flew.

Company officials predicted that revenue for every seat flown one mile — a closely watched measure in the airline business — would rise by between 2 percent and 4 percent in the first quarter compared with a year ago. They forecast that fuel prices would fall slightly as the year goes on.

"The industry is doing really well, and (American and US Airways) start at a strong place," Raymond James airline analyst Savanthi Syth said in an interview.