In this May 15, 2014 photo, a ramp worker rolls past an American Airlines McDonnell Douglas MD-82 at the Tampa International Airport in Tampa , Fla. American Airlines reports quarterly financial results on Thursday, July 24, 2014. (AP Photo/Chris O'Meara)
Republished July 24, 2014 - 8:00 AM
Original Publication Date July 24, 2014 - 5:50 AM
FORT WORTH, Texas - Profit and revenue are up at American Airlines, and the company will share some of the gains with shareholders.
American Airlines Group Inc. said Thursday that it earned a record $864 million in the second quarter, up from the $507 million that American and US Airways earned separately a year ago, before their merger.
Excluding special charges, the company said it earned a record $1.46 billion, or $1.98 per share. Analysts surveyed by FactSet expected $1.95 per share.
Revenue rose 10.2 per cent on a combined basis as passengers paid 6.5 per cent more per mile for their tickets.
American said that it will pay a dividend for the first time since 1980, buy back up to $1 billion in shares, and spend $2.8 billion to pay off debt and aircraft leases.
CEO Doug Parker said the ability to make those expenditures while buying new planes and combining American and US Airways showed that the merger was a success.
Several big mergers in the past decade have reduced competition and helped the surviving airlines control the number of flights and keep fares up.
American's yield, or the amount that passengers pay per mile in fares, rose 6.5 per cent over the same quarter last year. Domestic fares rose more quickly than those on international routes, where competitors have been adding flights.
On costs, American's fuel spending rose nearly 3 per cent and labour costs increased 10 per cent.
The shares rose 4 cents to $43.37 in morning trading. They began the day up 72 per cent in 2014.
News from © The Associated Press, 2014