By John Flett
American Airlines Reports Highest Quarterly Revenue Total Ever
American Airlines has announced a company record second-quarter revenue earnings of $13.4 billion for Q2 2022. The revenue figure is a 12.2 percent increase over the same quarter in 2019, despite capacity being down 8.5 percent. This gave the world’s largest airline a net profit of $476 million to end the second quarter with $15.6 billion of total available liquidity.
American Airlines’ chief executive officer Robert Isom said, “We are very pleased to report a quarterly profit, excluding net special items, for the first time since the start of the pandemic, driven by the strong demand environment and the hard work of our team. The American Airlines team has stepped up to meet the surge in demand for air travel while running a reliable operation in very challenging conditions. We are encouraged by the trends we’re seeing across the business, and we remain well-positioned for the continued recovery.”
American Airlines reported a robust operational performance for the second quarter with the airline and its regional partners operating more than 500,000 flights. The airline said: ‘In the second quarter, American flew a schedule that was more than 25% larger than its closest competitor as measured by total departures.’ Passenger enplanements exceeded 53 million with an average load factor of 87 percent, a ten-point increase over Q2 2021.
The airline’s presentation to support the Q2 2022 results gave insight into the areas of the operation that are contributing to American Airlines’ pandemic recovery. The revenues from the domestic leisure and short-haul international networks are over 120 percent of 2019 levels. Domestic business revenues have reached 110% of 2019 though the airline states that corporate/government revenues are only at 75% of pre-pandemic levels.
American Airlines’ long-haul operations are still below pre-pandemic levels given the travel restrictions that were still in place for part or all of the quarter. The pre-departure testing requirement for entry to the U.S. was removed in the second week of June so airlines are only just experiencing the benefits of an increase in international travelers. The next quarter will also encompass the European summer holiday period that has seen significant demand for air travel albeit with some negative operational impacts for airlines and airports on both sides of the Atlantic.
Looking ahead to the third quarter of 2022 American Airlines forecasts revenues to again be above those for the same quarter of 2019. The increase in passenger demand but decreased capacity should see revenues 10-12% higher than in Q3 2019. Capacity in terms of available seat miles (ASM) is forecast to be down 8-10% though the cost of operation of that capacity (CASM – Cost per available seat mile) excluding fuel and special items will see a 12-14 percent increase compared to the same quarter in 2019. Overall the forecast is that the total revenue per available seat mile (TRASM) will be up by 20-24% over Q3 2019 and American will see another profit in Q3 2022.
American Airlines touted a positive remainder of the summer by stating, ‘American is proud to offer customers the youngest fleet among U.S. network carriers and the largest network of any U.S. airline, with an expected average of more than 5,400 daily departures for the remainder of the summer.’