By Angela Chen
American Airlines Group Inc. said Friday that its first-quarter
earnings nearly doubled as the company continues to benefit from
low fuel prices.
However, it added that the strong dollar, competitive capacity
growth, and economic softness in Latin America pulled down
sales.
American Airlines, like other airlines, has benefited from the
sharp drop-off in oil prices. Operating expenses fell 7.1% in the
latest quarter to $8.6 billion, primarily because of a 42% drop in
fuel expense.
However, the company recognized $311 million in special charges
in the quarter, including $223 million in merger-integration
related expenses.
In all, American reported a profit of $932 million, or $1.30 a
share, up from $480 million, or 65 cents a share, a year earlier.
Excluding special charges related to repatriation of money in
Venezuela, earnings were $1.73 a share in the latest quarter.
American has significantly reduced capacity in Venezuela and is
no longer accepting bolivars as payment. As a result of these
negotiations, the company took a $13 million charge for
foreign-currency losses.
Revenue fell 1.7% to $9.83 billion.
Analysts polled by Thomson Reuters had called for earnings of
$1.71 a share on revenue of $9.83 billion.
American's revenue per available seat mile, a key measure of
performance for the airline industry, was down 1.7% from a year
earlier.
Rival United Continental reported Thursday that it swung to a
profit in the first quarter, as traffic and revenue per seat mile
both grew, while Southwest Airlines' earnings more than doubled as
customer demand led to a record-high load factor and it continued
to benefit from lower fuel prices.
Write to Angela Chen at angela.chen@dowjones.com