News and notes from American's first quarter earnings call

American Airlines turned in another massively profitable quarter. Photo: American. 

American Airlines turned in another massively profitable quarter. Photo: American. 

American Airlines on Friday held its first quarter earnings call, announcing it had made net profit, excluding special items, of $765 million.

I was listening to American's call, so I thought I would compile some of what I learned. I took notes but the direct quotes here come from a transcript compiled by seekingalpha.com.

Here we go ... 

  • This year, American will take delivery of 55 new mainline aircraft. It will retire 86.
  • American says its fleet has an average age of about 10-years-old. "When we did the merger, we had the second oldest fleet of the four largest airlines," CEO Doug Parker said. "Now we have the youngest." 
  • On the regional side, American Eagle carriers this year will add 49 aircraft and retire 23. 
  • American says its mishandled bag rate was down 20 percent, year over year, for the first quarter. 
  • American's most improved hubs, on a financial basis, year-over-year, were Chicago, Dallas and Los Angeles. Miami showed the most regression, because there's less demand for travel to Latin America.
  • American CEO Doug Parker spoke about why the airline recently instituted profit sharing for front-line workers. American's competitors have been doing this for awhile, but American did not, preferring instead to instead pay higher wages. Now, workers are getting both. "What we realized is if we were going to really get our team engaged and excited, which is an imperative to accomplishing all we want to accomplish and ... to compete against the other airlines, and particularly for premium travelers, we have to have our team engaged and excited and this was holding us back," Parker said.
  • By late this year, American will introduce new type of cheap ticket that will not include some usual frequent flier benefits. The airline has not said exactly how it will work but we might assume travelers on the cheapest tickets will not be eligible for free first class upgrades. They might not be able to choose seats in advance either. "The more you're paying, the better benefits you are going to get," American President Scott Kirby said.
  • American is in negotiations on a new credit card deal that could be very lucrative. "While I won't predict on this call when or even if we'll get a deal done, all of our large competitors have done new deals in the past couple of years and we expect a similar large tailwind for American Airlines when we do ultimately get a new deal done," Kirby said.