American Airlines Finally Posts its First Net Profit in 6 Years

American Airlines PlanesThe economy has finally started to bounce back across the world. This could not come at a better time for any industry. However, it might be the travel industry that it is going to help the most. In fact, the airline industry is already starting to see a huge improvement in the number of people who are flying again. For example, American Airlines has just reported its very first net profit in nearly six years.

According to American Airlines, it earned a net income of just over $220 million in the three months that ended June 30. This airline, which is based out of Fort Worth, Texas, was able to earn nearly $357 million, if expenses related to its bankruptcy reorganization are excluded. It is also important to keep in mind that a lot of this profit can be attributed to the fact that the airline reduced its labor costs by $328 million when compared to the same period in 2012.

Although this is great news for American Airlines, some experts say that the airline is not out of the woods just yet. That is because most of this improvement was due to the reduction in expenses. Overall, operating revenue for the company actually went down by close to $3 million to just $6.45 billion.

Tom Horton, the chief executive and chairman of American Airlines, said that this airline has finally been able to deliver its best financial performance since 2007. In fact, this is the airline’s best second-quarter performance in the history of the company, if special items are excluded. It is still trying to build up some momentum. The airline wants to build up as much momentum as possible while it prepares for its impending merger with US Airways. Right now, the American Airlines team is 73,000-strong around the entire world. After the merger, Horton is going to become the non-executive chairman for the company.

According to previous reports from American Airlines, the second and third quarters for the company have typically been the strongest. So the fact that the airline was able to have its strongest performance in its history is very exciting. It would have been more exciting for the company had it been able to achieve an operating profit. Still, reporting a net profit of any kind is good considering what the company has been through during the past few years.

Back in 2011, American Airlines actually filed for Chapter 11 bankruptcy. During all of 2012 the company was forced to cut back on its workforce while it started to reorganize its entire business model. The workers who were not cut were forced to accept huge cuts to their benefits and other working conditions. This was all part of a plan that was put into place that cost nearly $2 billion.

In February of this year, it was also announced that American Airlines and US Airways agreed to merger into one company. Just this past Friday, shareholders at US Airways approved this new merger. Now the merger is being viewed by United States and European antitrust officials.



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