American Airlines is making money again and beating expectations after its merger with US Airways.
The company posted earnings of $480 million Thursday, a record for the first quarter, which is usually the weakest three-month period for airlines during the year. As separate airlines, American and US Airways lost $297 million a year earlier.
The profit was helped by the sale of takeoff and landing slots at Washington’s Reagan National Airport. American and US Airways agreed to sell the slots to settle a government antitrust lawsuit that threatened to block the merger.
Excluding that sale and other items, the combined airline would have earned $402 million, or 54 cents per share, topping analyst projections for 48 cents per share.
Revenue rose 5.6 percent to $10 billion. Analysts expected $10.02 billion, according to a FactSet survey.
American Airlines Group Inc., formed by the December merger, is the largest airline in the world. CEO Doug Parker, who previously ran US Airways, said in a message to employees that, “In the entire history of American Airlines, we have never earned $400 million in the first three months of a year, but in the first three months since the merger, we did.”
Shares of the Fort Worth, Texas, company rose closed up 17 cents, or 0.46 percent, at $37.26.
Even with the turbulence of severe winter storms and stubbornly high fuel prices, many of the other major airlines reported strong results.
Mergers have reduced competition and made it easier for the airlines to limit the supply of seats and raise average fares. Extra fees bring in billions more each year.
On Thursday, Southwest Airlines also reported record profits for the first quarter, usually the weakest time of year for the airlines. That followed a rousing report from Delta Air Lines a day earlier.
Still stuck on the tarmac: United Airlines. While rivals were making money, United lost another $609 million during the first three months of the year.
The No. 2 airline company behind American, United Continental Holdings Inc. is struggling to make the 2010 merger of United and Continental work. As costs rise, United is taking in less per mile from passengers – it’s not charging fares high enough to cover expenses.