For the first quarter 2014,
The company believes it is more meaningful to compare year-over-year results for
First quarter 2014 net profit excluding net special credits was a record
"We are very pleased to report a record profit in our first full quarter as a merged company," said
Since closing the merger on
- Launched the world's largest codeshare, offering customers improved access to the company's global network by allowing them to book flights on both airlines' networks
- Provided reciprocal benefits for airport lounge and frequent flyer elite members, including priority check-in, waiving fees for checked bags, complimentary access to preferred seats, priority security lines, early boarding and priority baggage delivery
- Enabled AAdvantage® and Dividend Miles® members to earn and redeem miles when traveling across either airline's network
Joined operations at 58 airports, including
Moved US Airwaysinto the oneworld alliance on March 31and to the trans-Atlantic joint venture with American, British Airways, Iberia and Finnairon April 3
- Aligned award travel options, checked baggage policies and inflight services for First and Business Class customers
- Announced Sabre as the new Passenger Services System for the combined company
Closed the sale of the slot divestitures required by the
U.S. Department of Justiceat Ronald Reagan Washington National Airport(DCA). In total, the company received $381 millionin cash from the DCA sales and the sale of slots at New York's LaGuardia (LGA) Airport, which closed in the fourth quarter 2013.
Revenue and Cost Comparisons
On a combined basis, total revenues in the first quarter were a record
Total combined operating expenses in the first quarter were $9.3 billion, down 0.3 percent over first quarter 2013. Combined first quarter mainline cost per available seat mile (CASM) was 13.50 cents, down 2.7 percent on a 2.7 percent increase in mainline ASMs versus first quarter 2013. This cost improvement was largely due to a 4.8 percent decrease in year-over-year mainline fuel prices. Excluding special charges, fuel and profit sharing, mainline CASM was up 4.0 percent compared to the first quarter 2013, at
As of March 31, 2014, American had approximately $10.6 billion in total cash and short-term investments, of which $947 million was restricted. The company also has an undrawn revolving credit facility of
In the first quarter of 2014, the Venezuelan government announced that a newly-implemented system (SICAD I) will determine the exchange rate (which fluctuates as determined by weekly auctions and at
Since the merger, the company paid
In the first quarter, the company recognized a combined total of
$137 millionin net special credits consisting primarily of the gain on the sale of slots at Reagan National Airportoffset in part by integration and merger-related expenses
$47 millionin non-operating special charges due primarily to non-cash interest accretion on bankruptcy settlement obligations
$8 millionin non-cash deferred income tax provision related to certain indefinite-lived intangible assets
$4 millionin regional non-operating charges
Additional Integration Related Developments
$11 millionto employees for baggage handling and on-time performance in the month of January; this distribution of $100per employee is part of the company's Triple Play program which measures on-time arrivals and baggage performance as reported in the DOT's Air Travel Consumer Report (ATCR)
- Conducted first joint Captain Leadership Training with newly promoted captains from both airlines
April 9, Piedmontflight attendants ratified a new five-year Collective Bargaining Agreement
Opened a new
Admirals Clublounge at the company's Philadelphia(PHL) hub
As part of its plan to modernize its fleet by replacing older aircraft with newer, more fuel-efficient aircraft, the company inducted 12 new Airbus A321T aircraft into service between
New York's John F. Kennedy International Airport(JFK) and Los AngelesInternational Airport (LAX), and JFK and San FranciscoInternational Airport (SFO). American is now the only U.S. carrier to offer three classes of service between these key markets. The company also took delivery of one Airbus A330-200 aircraft, five Boeing737-800 aircraft and one Boeing777-300 aircraft during the first quarter.
Boeing767-300 and 777-200ER cabin retrofits, which feature lie-flat seats with direct aisle access in Business Class
April 2014, the company exercised its option to purchase (and thus terminated its existing lease financing arrangements) for 62 Airbus A320 family aircraft scheduled to be delivered between first quarter 2015 and third quarter 2017. In connection with this decision, the company also exercised its right to convert firm orders for 30 Airbus A320 family NEO aircraft (scheduled to be delivered in 2021 and 2022) to options to acquire such aircraft.
Community Relations Developments
Raised and contributed
$750,000to the Cystic Fibrosis Foundationthrough the company's 29th Annual Celebrity Ski event in Vail, Colo.
Completed 230 employee volunteer events and distributed more than
$500,000in grants in the communities American serves
Raised more than
$55,000in employee contributions for the American Airlinesand American Eagle Family Fundand the US Airways Education Foundationthrough the online auction of a trip to Toulouse, France, to take delivery of a new Airbus A330 aircraft
- Provided travel to 42 children and their families for critical surgeries through the company's Kids in Need program. Nearly 18 million frequent flyers donated more than 48 million miles to the program, which supports the mission of 40 children's organizations and makes travel possible for children in need.
Transported and worked with more than 60 assistance dogs in partnership with
Assistance Dogs International(ADI) through employees who volunteer with the company's Puppies in Flight program
Conference Call / Webcast Details
The company will conduct a live audio webcast of its earnings call today at 10:30 a.m. CDT, which will be available to the public on a listen-only basis at aa.com/investorrelations. An archive of the webcast will be available on the website through May 24, 2014.
Investor guidance will be available at aa.com/investorrelations immediately following the 10:30 a.m. CDT conference call. The company will provide guidance on a combined basis related to cost per available seat mile (CASM) excluding special items and fuel, fuel prices, other revenues and estimated interest expense/income on the Presentations/Updates section of its Investor Relations website. This update will also include information regarding capacity guidance, fleet plans and estimated capital spending for 2014.