In a boast that may cheer shareholders, but may also worry travelers and others, American Airlines CEO Doug Parker told a meeting of media and analysts that “I don’t think we’re ever going to lose money again. We have an industry that’s going to be profitable in good and bad times.”
Changes in competition (less), fuel costs (lower) and fees (much higher) have allowed AA to earn $19.2 billion in the last four years, compared to only about $1 billion between 1978 and 2013. Parker told the group he believes American should earn about $3 billion a year in pre-tax profits year after year.
While other large U.S. airlines have had similar results, industry analysts aren't so sure how that would hold up in a recession or big fuel-cost boost. There aren't a lot of services to cut anymore; meals are already largely gone, free baggage is mostly gone, and it's not clear that there are enough new fees that can be charged if that happens—and big fare increases might empty out many of the now-filled seats in the new planes the airlines are buying.
Comments (0)