American Airlines earns $476 million in record revenue in the second quarter

DALLAS — American Airlines earned $476 million in the second quarter on record revenue from summer travelers and said Thursday it expects to remain profitable in the third quarter.

It was American’s first quarterly profit without government pandemic aid in the COVID-19 era.

While leisure travelers’ incomes are rising, so are costs, especially for fuel. That kept quarterly earnings 28% below the same period in 2019.

American has been more aggressive than its closest rivals in rebuilding its schedule to near pre-pandemic levels. He has sometimes had trouble executing such a large operation.

American canceled 4,900 flights in June, more than any other US airline, and eliminated the highest percentage of its schedule among major US carriers, according to figures from FlightAware. Only Southwest Airlines had more flight delays.

Airlines have blamed bad weather and understaffing of federal air traffic controllers for many of their flight delays this summer, but part of the problem is also a shortage of workers. Airlines paid tens of thousands of employees to quit after the pandemic devastated their business in 2020, and they are still hiring and training replacements.

Chief Executive Officer Robert Isom said American has hired 20,000 people to cover attrition and add new positions. The only shortage of personnel, he said, concerns pilots from regional affiliates, which fly smaller planes under the American Eagle brand. That has led to the equivalent of parking 100 Eagle planes, officials said.

American could cut scheduled flights to make them work better, as rival United Airlines announced Wednesday that it will do so for the rest of this year.

“We are sizing the airline for the resources that we have available and the operating conditions that we face,” Isom said Thursday on a call with analysts and reporters.

London has become a hotspot for airlines and their passengers, a symbol of how the industry has stumbled in handling large crowds. United CEO Scott Kirby called Heathrow airport on Wednesday, and American’s top lobbyist Nate Gatten did the same on Thursday.

Gatten said Heathrow officials told American “on extremely short notice” last week to cancel outbound flights to help the airport handle overcrowding. He said that left the airline with few options to divert passengers. Heathrow is expected to maintain some kind of restrictions until mid-September, although airlines don’t know exactly what the rules will be, he said.

Air travel in the US is back to nearly 90% of 2019 levels, according to government figures, though corporate travel is still down 20-25%, American said. International bookings improved during the quarter, American said, and are expected to continue to rise now that the government has removed the requirement for a negative COVID-19 test for people flying to the United States.

The Fort Worth, Texas-based airline said it expects a profitable third quarter, based on travel demand and forecast fuel prices. It said revenue will be 10% to 12% higher than the same period in 2019, even as it cuts passenger-carrying capacity 8% to 10%.

In the second quarter, American’s adjusted profit was 76 cents per share, a penny below the forecast of analysts surveyed by FactSet.

Revenue was $13.42 billion, up 12% from the same period in 2019, despite nearly 9% fewer flights. Analysts had expected $13.33 billion.

Shares of American Airlines Group Inc. fell 8% in morning trading on Thursday. Airline stocks were dragged lower by United’s report the day before that its second-quarter profit missed Wall Street targets and it will cut flights.

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