Friday, 24 October 2014

American Airlines 3rd Quarter Profits at $942 million

World’s largest airline in terms of passenger traffic is leading the pack of American airlines in terms of profitability. American Airlines, along with US Airways, has made a record of sorts by declaring a profit of $942 millions in third quarter this year. And, if one is to go by what its CEO Doug Barker is saying, the next quarter is expected to see even more profits and, therefore, this year will see full profits all through.

There are a number of reasons why this has turned out to be so. At first, there has been a lowering of the Jet Fuel prices all over the world.  This has helped the airlines to reduce its costs. Aviation fuel, also called jet fuel, is the largest single head which contributes to the prices of the tickets.

At the same time, there have been good yields. This means that the passengers have paid more per mile flown. The airline has been able to charge average or higher tariffs because of another contributory reason that there have been mergers going on in the US aviation sector which has led to reduced competition enabling them to command better prices from the passenger.  Mergers have also led to rationalization of the flight routes, controlling expansion of fleet and trimming of expenses.

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