Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )
 January 29, 2016 - 11:37 PM EST
Print Email Article Font Down Font Up
The Philadelphia Inquirer Linda Loyd column

Jan. 30--American Airlines,

largest carrier, reported a record fourth-quarter profit Friday on falling oil prices and strong corporate travel.

Business customers and all fliers also fared well, paying lower ticket prices in the latest quarter as American matched the fares of discount carriers Spirit and Frontier Airlines, which have been expanding in cities including


American said it plans to roll out a "basic economy fare" in the second half of this year to compete with the "no frills" ticket prices of Spirit and Frontier.

"Details to come," said American president Scott Kirby on a call with investors.

American earned $1.3 billion, or $2 per share, in the latest quarter up from $1.1 billion a year earlier. Analysts expected $1.97 per share.

However, revenue in the fourth quarter dropped to $9.64 billion, from $10.2 billion a year earlier, due to lower fares, less traffic in

Latin America
, and a strong
dollar that has affected international travel.

Passenger revenue for each mile flown, a key industry measure, fell 8.9 percent.

American saw a 17 percent drop in passenger unit revenue in

Latin America
, especially in
, due to weak economies and currency devaluation.

American has battled for passengers and cut fares in

, where rival Southwest Airlines has aggressively increased flights at Dallas Love Field. American's headquarters and home airport is
Dallas-Fort Worth

American reported a full-year 2015 profit of $6.3 billion, up from $4.2 billion the year before.

American benefits from cheaper oil more than its competitors because it is the only major airline not to buy expensive fuel hedges in advance to lock in rates and protect against swings in oil prices. American pays market prices for fuel, a boon during times of cheaper oil and a risk when oil prices are high.

American forecast that passenger unit revenue will decline between 6 percent and 8 percent in the current first quarter.

The carrier, which operates 76 percent of the flights at Philadelphia International Airport, said it has not seen a measurable impact in cancellations due to the Zika virus, a mosquito-borne disease. The Centers for Disease Control and Prevention has warned pregnant women to postpone travel to affected areas, such as

Puerto Rico
, and the

"It's obviously a little early to tell if it will have any impact on travel," Kirby said. "We haven't seen an effect yet."

American shares closed up 85 cents, or 2.23 percent, at $38.99 Friday.




(c)2016 The Philadelphia Inquirer

Visit The Philadelphia Inquirer at

Distributed by Tribune Content Agency, LLC.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:

Source: News (January 29, 2016 - 11:37 PM EST)

News by QuoteMedia