American Airlines has reported third-quarter 2019 pre-tax income of $557 million and net income of $425 million.
Excluding net special items, both pre-tax income and net income rose more than 15% year over year to $835 million and $630 million, respectively.
Strong passenger demand drove a 3% year-over-year increase in third-quarter 2019 total revenue to a record $11.9 billion. Driven by a three percentage point increase in total passenger load factor, passenger revenue per available seat mile (PRASM) grew 3%.
Cargo revenue decreased 20% to $208 million due primarily to a 17% decrease in cargo ton miles. Other revenue was down 4% to $708 million. Third-quarter 2019 TRASM increased by 2% year over year, marking the 12th consecutive quarter of growth.
Reported record third-quarter revenue of $11.9 billion. Also reported third-quarter total revenue per available seat mile (TRASM) saw an increase of 2% year over year.
Total third-quarter 2019 operating expenses were $11.1 billion, up 2% year over year. Total operating cost per available seat mile (CASM) was 14.64 cents in the third quarter of 2019, up 1% from the third quarter of 2018. Excluding fuel and net special items, third-quarter 2019 CASM was 11.07 cents, up 5% year over year due primarily to higher salaries and benefits, maintenance and regional expense, and lower than planned capacity.
“We are pleased to report an earnings increase of 15% and earnings per share growth of 20% for the third quarter, excluding net special items,” said Chairman and CEO Doug Parker. “However, we know that our results should have been better. Our third quarter was impacted by the continued grounding of the Boeing 737 MAX and the operational challenges resulting from ongoing labour contract negotiations. These challenges affected our customers, our shareholders and our team members, who we thank for their hard work and perseverance.”
“We are taking decisive action to correct this performance and are excited about our prospects for 2020 and beyond. As we look forward, we are committed to restoring operational excellence, growing efficiently and profitably, and generating significant free cash flow for our investors.”
The American fleet currently includes 24 MAX aircraft with an additional 76 aircraft on order, of which five were scheduled to be delivered in the third quarter. As a result of this directive, American cancelled 9,475 flights in the third quarter of 2019. The company estimates that the cancellations in the third quarter negatively impacted pre-tax income by approximately $140 million.
The company has removed all MAX flying from its flight schedule through 15 January 2020. With the flight cancellations extending through the remainder of 2019, the company now expects the MAX cancellations will negatively impact its full-year 2019 pre-tax income by approximately $540 million.