US Airways and American Airlines Combine for $1.95 Billion in Earnings
The report was muddied up because of the bankruptcy and merger, which combined the two airlines and gave the numbers a large amount of asterisks.
The net income announced excludes the $3.1 billion in one-time charges and special items, with the majority related directly to the bankruptcy filing by American.
The earnings report also assumed that the two airlines had operated as one for the entire year, and not just the 23 days during December following the merger of the two on December 9.
However, considering the many cautions, airline analysts said the earnings represented a strong start for the company post-merger.
Doug Parker, the CEO of American told analysts that the airline had a lot of work ahead of it. However, Parker said the results give evidence that a strong foundation remains in place and the company plans to improve the results during 2014, as the airlines are completely merged.
For the last quarter of 2013, the earnings for the combined airlines were $436 million excluding the special items, which compared to a loss during the last quarter of 2012 of $42 million. Revenue for the fourth quarter was $10 billion.
Apparently, the numbers were liked by investors as the stock in the company was up over 5.9% to end the day on Tuesday at $31.96. Shares of American Airlines Group have jumped by over 30% since the merger day on December 9 when they were $24.60.
While touting earnings on Tuesday, officials from the airline said they were planning to add additional seats to the fleets this year. Scott Kirby the President of the company said that the fleets MD-80s already had increased seating from 135 to 140.
Since the combined US Airways Group and AMR only had 23 days for the year to combine forces, the last quarter report and that of the full year has a number of asterisks in which earnings are reported.
As part of that complexity, the report on Tuesday released by the new airline was 24 pages in length and included over 16 pages of figures, to show how each performed separating and how the two performed as one.