American Airlines sets record for quarterly revenue, returns to profitability: Travel Weekly

Robert Isom said that travel is coming back in record numbers.

• Related: Delta CEO apologizes for Q2 operational difficulties

Despite flying less, American took in $13.4 billion, an increase of 12.2% from the same period in 2019. The company executives said that American flew 25% more flights than any other U.S. airline and filled 85% of available seats.

Net income for the quarter was $476 million.

Wages and fuel prices more than doubled over the past year, and soaring revenues were accompanied by ballooning costs. The total operating expenses for the quarter of $12.4 billion left American with a relatively lean pre-tax profit margin of 4.5% as the carrier's costs were 25.5% higher per seat miles flown than during the spring quarter of 2019.

The pilot shortage and profit margins

American predicts that revenue will be 10% to 12% higher in the third quarter than it was in the second quarter. The airline expects an operating margin of 2% to 4% in the third quarter due to the regional airline pilot shortage and aircraft delivery delays.

The pilot shortage caused American to ground 100 regional jets and reduce utilization of its mainline jets during the second quarter. The equivalent of 45 planes were grounded due to the lower mainline utilization.

The carrier hopes to have its mainline fleet fully utilized by the end of next year, but it will take at least two to three years to hire enough pilots to re-engage the regional fleet.

American is able to generate revenue premiums out of the small markets it serves by offering more regional flying than Delta and United, according to company executives. Increasing profit margins will be achieved if the airline restores its full regional fleet.

It's important that the regional network to American Airlines is there. Isom made a statement.

Domestic revenue for the second quarter exceeded the year before by 16%, with leisure revenue up 21% and domestic business revenue up 10%.

Business travel revenue is up 25% from pre-pandemic levels despite the fact that managed corporate travel revenue is up 75%.

In late-morning trading, American stock was down nearly 8%.