American Airlines touts improvement in its operations
American Airlines is boasting about the carrier’s strong recent operational performance, and company executives are promising more of the same going forward.
“American is in a position of strength coming out of the pandemic,” CEO Robert Isom said during the company’s Q4 earnings call Thursday. “We’re going to focus on our goals: reliability and profitability.”
For 2022, American finished behind hub-network competitors Delta and United in terms of on-time arrivals and cancellations, according to airline industry data provider Cirium. American’s cancellation rate, including regional American Eagle flights operated by American subsidiaries and contracted partners, was 97.4%. It’s on-time arrival rate was 80.21%.
But Isom said American had the best operational performance among the mainline domestic carriers over the holiday period. FlightAware data backs up that assertion, at least in terms of cancellations, showing that American has canceled just 1% of its flights since the Friday prior to Thanksgiving. That ranks the carrier ahead of traditional stalwarts Delta and Hawaiian as well as the remainder of the top 10 U.S. carriers. Those figures don’t include regional American Eagle flights, but FlightAware data shows competitive cancellation rates during that period — 2% for each of the three American-owned regional carriers, Piedmont, PSA and Envoy.
For the fourth quarter, American also bested all but Hawaiian in terms of cancellations rates, according to FlightAware. The carrier’s mainline on-time performance lagged behind Delta and United but bested Southwest and the remaining top 10 U.S. carriers.
How American Airlines improved its performance
Isom explained that the operational improvements have been due to scheduling discipline more than anything. “We don’t put out a schedule we can’t fly,” he said.
But Isom also said IT upgrades related to tracking crew and planes, combined with having the youngest fleet among the network U.S. airlines, have also played a role in American’s progress.
American COO David Seymour added that the carrier has especially focused on enhancing its processes and procedures for recovering from weather-caused network disruptions, such as Winter Storm Elliott, which rolled across the U.S. just a few days before Christmas.
“We started building our recovery plan before the storm hit, and that’s what we’re very focused on,” he said.
American Airlines profitable in 2022
American reported net income for 2022 of $127 million, its first profitable year since 2019. The carrier recorded the profit despite losing $1.9 billion in the first quarter. American’s revenue for the year was $48.97 billion, up from $45.77 billion in 2019. Expenses were $47.36 billion, up from $42.7 billion in 2019, due in large part to high fuel prices.
Related: American CEO says updating FAA technology is a big job
For the fourth quarter, American had record net income of $803 million and record operating revenue of $13.19 billion on 6.1% less capacity than 2019. Pre-tax operating expenses were $11.8 billion.
The carrier said that demand remains robust for the first half of this year. American expects capacity during the first quarter to be up 8% to 10% from the first three months of 2022, which were marred by the omicron variant of Covid-19.
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