FORT WORTH, Texas — American Airlines Group Inc. (NASDAQ: AAL) today announced the election of Adriane M. Brown, 62, to its board of directors. Brown will also serve on the company’s Audit and Corporate Governance and Public Responsibility committees.
Brown currently serves as managing partner at Seattle-based venture capital firm Flying Fish Partners. She also sits on the boards of Axon Enterprise, Inc., eBay Inc. and the Washington Research Foundation/WRF Capital.
Brown has held a number of senior leadership positions during her career, including president and chief operating officer at Intellectual Ventures Management, LLC, president and CEO of Transportation Systems and vice president and GM of two aerospace divisions at Honeywell International Inc. Brown launched her career at Corning Incorporated and rose to hold several senior roles. She previously served on the boards of The Raytheon Company, Allergan plc and Harman International Industries, Incorporated.
She holds a Bachelor of Science in environmental health from Old Dominion University and a Master of Science in management from the Massachusetts Institute of Technology.
FORT WORTH, Texas — American Airlines Group Inc. (NASDAQ: AAL) today reported its fourth-quarter and full-year 2019 financial results, including these highlights:
Fourth-quarter 2019 earnings were $0.95 per diluted share. Excluding net special items1, earnings were $1.15 per diluted share, up 19% year over year.
Full-year 2019 earnings were $3.79 per diluted share. Excluding net special items2, earnings were $4.90 per diluted share, up 8% year over year.
Accrued $213 million for the company’s profit-sharing program in 2019, including $74 million in the fourth quarter.
Returned $1.3 billion to shareholders in the form of dividends and share repurchases in 2019.
“During the fourth quarter, we made important progress to address the issues that impacted our business in 2019, and, thanks to our incredible team, we ended the year with our strongest operational quarter on record,” said American Airlines Chairman and CEO Doug Parker.
“While our results for the quarter reflect this progress, we know there is more work to be done. Looking to 2020, we are focused on three key areas. First, we will continue to deliver operational excellence and build on our strong fourth-quarter results. Our team has done a tremendous job, and we will keep driving improvement in key operational metrics in the year ahead. Second, we will deliver those results while growing where we have a competitive advantage in our most profitable hubs. And third, these initiatives combined with our capital plan will enable us to drive significant free cash flow in 2020 and beyond.”
Fourth-Quarter Revenue and Expenses
Pre-tax earnings were $571 million in the fourth quarter of 2019. Pre-tax earnings excluding net special items for the fourth quarter of 2019 were $679 million, a $90 million increase from the fourth quarter of 2018, or 15.1% year-over-year increase from the same period last year.
Continued strength in passenger demand and a record passenger load factor drove a 3.4% year-over-year increase in fourth-quarter 2019 total revenue to a record $11.3 billion. Driven by a 2.4% increase in passenger load factor, passenger revenue per available seat mile (PRASM) grew 0.9% to 14.72 cents, a record for the fourth quarter. Cargo revenue was down 18.3% to $216 million due primarily to a 15.6% decline in cargo volume. Other revenue was up 5.4% to $750 million due primarily to higher loyalty revenue. Fourth-quarter total revenue per available seat mile (TRASM) increased by 0.5% compared to the fourth quarter of 2018 on a 2.9% increase in total available seat miles.
Total fourth-quarter 2019 operating expenses were $10.6 billion, up 2.1% year over year, driven primarily by higher salaries and benefits, maintenance, and regional expenses. Total fourth-quarter 2019 cost per available seat mile (CASM) was 15.06 cents, down 0.8% from fourth-quarter 2018. Excluding fuel and net special items, consolidated fourth-quarter CASM was 11.59 cents, up 2% year over year.1
2020 Priorities
In 2020, American is focused on operational excellence, efficient and profitable growth, and generating significant free cash flow.
Operational excellence: Running a reliable operation is a significant driver of customers’ likelihood to recommend and American’s goal to become customers’ airline of choice.
Efficient and profitable growth: Grow in high-revenue markets that produce at or above average unit revenues, largely due to new gates in Dallas-Fort Worth and Charlotte, North Carolina.
Generating significant free cash flow3: Use free cash flow to naturally de-lever the company’s balance sheet and return capital to American’s shareholders.
São José dos Campos-SP, August 16 2019 – Embraer unveiled today, on the eve of its 50th anniversary, images of the demonstrator aircraft with 100% electric propulsion technology, which is currently under development. The prototype has a special paint scheme and is ready to receive systems and components.
The aircraft’s electric motor and controller are being manufactured by WEG at the company’s headquarters in Jaraguá do Sul, Santa Catarina, Brazil, as part of the scientific and technological cooperation agreement for jointly development of electrification technologies.
Advances on the project include the partnership with Parker Aerospace that will be responsible to supply the cooling system for the demonstrator aircraft.
On the forthcoming months, the companies’ technical teams will continue to test the systems in the labs preparing the integration in the demonstrator aircraft for testing under real operating conditions. The first flight of the prototype is scheduled for 2020.
About the technological cooperation
The proposed scientific development program of aeronautical electrification, formalized through the cooperation between Embraer and WEG announced in May 2019, constitutes an effective and efficient instrument for experimentation and maturation of the technologies before they are applied in future products.
The partnership, in the context of pre-competitive research and development, seeks to accelerate the knowledge of the necessary technologies to increase the energy efficiency of an aircraft, considering the use and integration of electric motors into innovative propulsion systems. A small single-engine aircraft, based on the EMB-203 Ipanema, will be used as test bed, carrying out the initial evaluation of the electrification technology.
The electrification process is part of a series of efforts carried out by Embraer and the aeronautical industry aimed at ensuring the commitment with the environmental sustainability, as already done with biofuels to reduce carbon emissions.
By establishing strategic partnerships through more agile cooperation mechanisms, Embraer is stimulating knowledge networks to allow a significant increase in Brazil’s competitiveness and the construction of a sustainable future.
FORT WORTH, Texas — American Airlines is donating $75,000 to the El Paso Community Foundation and $75,000 to the Dayton Oregon District Tragedy Fund at the Dayton Foundation to support the communities in the wake of shootings this weekend in both cities. El Paso is one of 24 cities in its home state of Texas that American serves, and Dayton is home to PSA Airlines, one of American’s three wholly owned subsidiary carriers.
“We are saddened by the tragic events that took place this weekend in El Paso and Dayton,” said Chairman and CEO Doug Parker. “American has a long history of serving both communities, and we want to do our part to ensure that those who were affected by these senseless acts of violence have access to the resources they need.”
The El Paso Community Foundation was established in 1977 as a permanent endowment for the long-term benefit of El Paso and the surrounding region and serves as a charitable resource to donors, nonprofit organizations and the community at large.
The Dayton Foundation, the region’s largest community foundation, has been providing services, support and counsel to other nonprofits since its establishment in 1921. The donation to the Dayton Oregon District Tragedy Fund at the Dayton Foundation is made on behalf of both American and PSA.
“All of us at PSA are deeply affected by last night’s events,” said PSA President Dion Flannery. “Over the coming weeks, we will work with community leaders and partners to identify volunteer opportunities for our Dayton-based team members to support those in our hometown.”
WASHINGTON (Reuters) – American Airlines Group Inc and Qantas Airways Ltd have been given the U.S. government’s tentative approval to operate a joint venture after a prior effort was rejected in 2016.
The U.S. Department of Transportation on Monday issued an order tentatively approving the joint business agreement and tentatively granting antitrust immunity to the airlines covering international service. An application for a joint venture covering the United States, Australia and New Zealand was rejected by former President Barack Obama’s administration.
The deal would allow the airlines to coordinate their planning, pricing, sales and frequent flyer programs, with new options and customer service improvements. The airlines planned up to three new routes within the first two years and increased capacity on existing routes, the department said.
American Airlines said a final decision is expected in the coming weeks.
“The joint business will also create additional jobs at our respective companies and in the industries we serve,” said American Chairman and Chief Executive Officer Doug Parker.
The department will require the airlines perform a self-assessment of the joint venture’s impact on competition seven years after it takes effect and report their findings to the government, which could subsequently take action.
Regulators in Australia and New Zealand approved the first application for the joint venture before it was initially rejected by the U.S. Transportation Department.
American and Qantas in February 2018 made a second attempt to gain U.S. regulatory permission under President Donald Trump’s administration for a venture that would let them coordinate prices and schedules. They threatened to cancel services if it was rejected and argued it could “unlock” up to $310 million annually in consumer benefits.
The revised application made significant changes, including removing a provision that would have barred either carrier from code-sharing with other carriers. Code-sharing is an arrangement between airlines in which two or more carriers publish and advertise a single flight under their own flight number.
The airlines argued in their 2018 application that the venture would lead to a reduction in fares and higher capacity as a “more viable third competitor” and require other carriers to respond with improvements in quality, schedules and prices.
Qantas said last year the joint venture would allow the two airlines to “significantly improve service” and “stimulate demand.” The airlines said the agreement could generate up to 180,000 new trips between the United States and Australia and New Zealand annually.
U.S. regulators in 2001 approved similar joint venture agreements for United and Air New Zealand Ltd and in 2011 for Delta Air Lines Inc and Virgin Australia.
(Reporting by David Shepardson; Editing by Dan Grebler and Grant McCool)
An American Airlines Boeing 737-800 airplane takes off at Simon Bolivar International Airport in Caracas, Venezuela January 25, 2019. REUTERS/Andres Martinez Casares
American Airlines planes stand at Dallas-Fort Worth International Airport in Grapevine, Texas, on April 6, 2018. MUST CREDIT: Bloomberg photo by Patrick T. Fallon.
Terminal F projected to open as soon as 2025, Terminal C to be upgraded
DFW AIRPORT, Texas — Dallas Fort Worth International (DFW) Airport and American Airlines have announced plans to develop a sixth terminal, providing a long-term commitment from the airline and opportunities for businesses and customers in the fastest growing region in the United States.
The plans call for DFW to invest up to $3 to $3.5 billion in terminal improvements, including the construction of Terminal F and enhancements to Terminal C. The identified site south of Terminal D provides significant flexibility for phasing in the number of gates for Terminal F, with a long-term projection of up to 24 gates, as demand for additional facilities is warranted.
Design work for Terminal F will begin immediately. DFW and American will explore several different options for the layout of the Terminal F site. DFW and American expect the details to be finalized as part of a new airlines lease agreement for DFW that is being negotiated. DFW and American anticipate the investment to be financed by bonds and repaid through airlines rates and charges over the life of the bonds.
“Today’s announcement sets the stage for DFW Airport’s next 50 years,” said Sean Donohue, CEO of DFW Airport. “The new Terminal F and the expansion that could follow will provide the region with the growth it needs to compete with international business centers. The Airport is growing faster than ever, and it needs to keep pace with the Dallas-Fort Worth economy to provide jobs and connections for businesses and families. We’re grateful to Dallas Mayor Mike Rawlings, Fort Worth Mayor Betsy Price and Board Chairman Bill Meadows for their leadership. I want to especially recognize American for its commitment to DFW Airport. We look forward to working together to deliver what will be an efficient, modern terminal with a state-of-the-art customer experience.”
“This is an exciting day for American and our more than 31,000 team members who call Dallas-Fort Worth home. American enjoys a wonderful relationship with the City of Fort Worth, the City of Dallas and DFW Airport, and we thank Mayor Price, Mayor Rawlings, and Sean and the entire DFW team for being such great partners. DFW is American’s largest hub and a central gateway to our extensive international and domestic network. The plans we’re announcing today will allow for the continued growth of DFW and ensure the airport remains a premier gateway for American for many more years to come.”
— Doug Parker, American Airlines Chairman and CEO
“We look forward to accommodating the continued growth of our city and the region through infrastructure improvements and expansion at DFW Airport,” said Fort Worth Mayor Betsy Price. “We’re glad to see DFW’s anchor carrier, American Airlines, headquartered in Fort Worth, collaborate with the Airport to take this area to new heights. This new terminal will further fuel economic development and job growth in our region.”
“This is one of the most significant announcements in my eight years as mayor,” said Dallas Mayor Mike Rawlings. “The fact that American Airlines believes in the DFW International Airport Board and management enough to make this tremendous investment in the future of the Airport is something we should all celebrate. This will further solidify DFW’s standing as one of the best international airports in the world.”
The design of Terminal F is expected to accommodate a changing aviation industry as DFW utilizes innovative technologies to facilitate the movement of customers, maintain cost efficiencies for airlines and improve operational performance.
Terminal C is one of the Airport’s original terminals and opened in 1974. DFW and American plan to significantly improve the customer experience at Terminal C, bringing it in line with Terminals A, B and E, on which renovations were completed in 2018. Those renovations included redesigned check-in areas, larger security checkpoints, expanded concessions spaces, and improved lighting and flooring.
DFW Airport welcomed a record 69 million customers in 2018, and the Airport anticipates more passengers and air service to be added in the next two years than in the past two decades. In 2018, DFW announced 28 new destinations, giving it a larger domestic footprint than any other U.S. airport. Customers also have access to more than 60 international destinations from DFW, with double the number of European destinations and frequencies since 2015.
Over the past several years, American has expanded with additional DFW service, and by June 2019, the airline will operate more than 900 daily flights from the Airport. In total, customers have access to more than 230 nonstop destinations on American from DFW.
A 2015 economic impact study indicates DFW Airport contributes more than $37 billion to the Dallas-Fort Worth economy, with nearly 60,000 jobs at the Airport and more than 228,000 jobs created across the region. In 2018, DFW Airport awarded more than $150 million in contracts to small, women- and minority-owned businesses, and concessions agreements generated more than $155 million in revenues for disadvantaged businesses.
The expansion project at Chicago O’Hare is expected to cost $8.5 billion and is hoped to increase the ease with which passengers travel through the terminal, increasing the passenger experience.
The City of Chicago has announced the selection of an architect team to lead the design of the unprecedented $8.5 billion expansion programme for O’Hare International Airport. Studio ORD has been selected to design the new O’Hare Global Terminal and Global Concourse. Studio ORD will work with the City of Chicago and the airlines to design the new Global Terminal and Concourse.
It can’t be fun to be American Airlines(NASDAQ: AAL) CEO Doug Parker right now. His company has experienced massive nonfuel cost increases over the past few years. Now that the carrier is finally reining in controllable costs, fuel prices have surged, creating a new headache. Meanwhile, American has the weakest balance sheet of any major U.S. airline.
At a major industry event last week, Parker reiterated his stance that industry capacity growth will slow and airfares will rise to offset the increase in fuel costs. However, he acknowledged that this process wasn’t likely to play out right away.
