American Airlines posts record first quarter profit of $932 million

American Airlines posted impressive first-quarter profit of $932 million, which is nearly double the profit it made in the same quarter last year of $480 million.

Record profits for the airline is partly thanks to much cheaper jet fuel. The spot price of jet fuel is 40 percent cheaper than in September, meaning that airlines have been able to significantly cut costs.

Revenue for American Airlines dropped 1.7 percent to $9.82 billion for the quarter, as passengers flew fewer miles.

However, because of a $1.36 billion cut in its fuel bill the company’s earnings soared.

Excluding net special charges, American Airlines Group’s first quarter 2015 net profit was a record $1.2 billion, or $1.73 per diluted share. This represents a tripling of the its first quarter 2014 net profit excluding net special credits of $402 million, or $0.54 per diluted share.

According to the airline, it paid an average of $1.86 per gallon for jet fuel in the quarter, which is 40 percent less than what it paid for jet fuel in Q1 2014, of $3.10 per gallon.

Key figures (in millions USD except for share data) Q1 2015 Q1 2014
Revenue $9,827 $9,995
Total operating expenses $8,611 $9,265
Net income $932 $480
Earnings per share (diluted) $1.30 $0.65

“We are pleased to report record first quarter profits, exceeding the prior record set just last year,” said Doug Parker, American Airlines Group Chairman and CEO.

“The credit belongs to our 100,000 team members who are working together to restore American to the greatest airline in the world. We are particularly pleased with the integration achievements our team has realized and look forward to building on those successes through 2015 and beyond.”

In the first quarter, American Airlines returned $260 million to its shareholders through the payment of $70 million in quarterly dividends and the repurchase of $190 million of common stock, or 3.8 million shares, at an average price of $49.47 per share.

“American continues to decrease capacity to weak international markets, but is still the largest U.S. airline in the region so it is more affected than its peer group by weak demand,” Helane Becker, an analyst with Cowen & Co, wrote in a research note to investors.

“We expect further capacity cuts will be announced in early May for [the second half of 2015], as management continues to adjust its schedule.”