American Airlines swings to $480 million profit in first quarter after US Airways merger
The federal government says the proposed merger of American Airlines and US Airways would cause "substantial harm" to consumers by leading to higher fares and fees. Credit: AP
American Airlines is making money again and beating expectations after its merger with US Airways.
The company posted earnings of $480 million Thursday, a record for the first quarter, which is usually the weakest three-month period for airlines during the year. As separate airlines, American and US Airways lost $297 million a year earlier.
The profit was helped by the sale of takeoff and landing slots at Washington's Reagan National Airport. American and US Airways agreed to sell the slots to settle a government antitrust lawsuit that threatened to block the merger.
Excluding that sale and other items, the combined airline would have earned $402 million, or 54 cents per share, topping analyst projections for 48 cents per share.
Revenue rose 5.6 percent to $10 billion. Analysts expected $10.02 billion, according to a FactSet survey.
American Airlines Group Inc., formed by the December merger, is the largest airline in the world. CEO Doug Parker, who previously ran US Airways, said in a message to employees that, "In the entire history of American Airlines, we have never earned $400 million in the first three months of a year, but in the first three months since the merger, we did."
Shares of the Fort Worth, Texas, company rose 52 cents to $37.61 in premarket trading. At Wednesday's closing price, they were up 47 percent this year.
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