American Airlines Significantly Boosts Its Profits

American Airlines has boosted its profitability by almost nine times from quarter two to quarter three. The US big three carrier posted a profit of $169 million from July to September. This compares to a profit of $19 million for Q2 and a loss of $2.4 billion during Q3 last year.

American Airlines, Profit, Profitable Airline
American Airlines posted a profit of $169 billion for the three months from July to September. Photo: Getty Images

All in all, 2021 seems to have been a good year for American Airlines so far, despite the impact of the Delta variant in the United States. The airline returned to profitability earlier this year, has its Boeing 737 MAX aircraft back in service and has largely restored flight schedules. All of this is shown in the carrier’s financial results.

$169 million profit

For the three months from July to September, American Airlines recorded a profit of $169 million. The airline clocked an operating revenue of $8.969 billion, with $8.0 billion coming from passengers. Of course, running an airline isn’t cheap, which explains why the airline’s profit is only 2% of the revenue.

The airline’s total operating expenses came in at $8.374 billion, giving an operating profit of $595 million. The airline’s single most significant expense was its staff, which clocked in at $3 billion. Next up was aircraft fuel, which American Airlines spent $1.952 billion on during the three months. Altogether, the costs for maintenance, rent (aircraft and other), and landing fees came to just $1.6 billion.

American Airlines, Profit, Profitable Airline
American Airlines spent around three billion dollars on staff for the quarter. Photo: American Airlines

Digging into the numbers

Compared to a year ago, American Airlines is carrying substantially more passengers, which is a significant driver behind its increased profitability. Out of 61 billion available seat miles operated by the airline during the quarter, 48 billion were occupied by revenue-generating passengers, giving a load factor of 78.7%. A year ago, the load factor was almost 20% lower at 58.9%.

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The available seat miles increased by 98.6%. Despite this, the airline’s fuel consumption only increased by 88.5%. This year the airline used 941 million gallons compared to 499 million gallons last year. The airline’s fuel bill increased by over 200% because the price of jet fuel has risen sharply in the past year. A year ago, while flight numbers were relatively suppressed, fuel was pretty cheap, with an average price of $1.23 per gallon. This year that had increased by 69.2% to $2.07 per gallon.

American Airlines, Profit, Profitable Airline
The cost of fueling the aircraft went up alongside the amount of fuel needed. Photo: American Airlines

The airline also paid off the debt secured against 20 of its Boeing 777-200 aircraft during the quarter. Commenting on the figures, American Airlines’ Chairman and CEO, Doug Parker, said,

“While the rise of the COVID-19 delta variant delayed some of our revenue recovery, it has not stopped our progress. We are incredibly proud of the team’s hard work to operate a great airline, and with the network, cost and fleet simplification actions we have taken, we’re confident American is well-positioned as the recovery takes hold.”

What do you make of American Airlines’ Q3 results? What were you expecting from the airline? Let us know what you think and why in the comments!