American Airlines chief executive Doug Parker is not happy with the carrier’s drop in revenues this quarter.
“On the revenue environment, we think there are brighter days ahead but we’re not pleased with where we are now,” Parker told Wall Street analysts and investors on a conference call Friday morning. “None of us were looking out a year ago and thinking we’d see these kinds of revenue declines.”
The Fort Worth-based carrier cited a number of factors, such as a slowing Latin America economy and a strong U.S. dollar versus foreign currencies, as to why its revenues declined 4 percent. But executives admitted American was the slowest growing airline in the U.S. last year and it plans to reduce its capacity plan as it continues to see declining unit revenues.
American expects to introduce its basic and premium economy products later this year which should help improve the carrier’s revenues in 2017, the company said.
Here are a few other items mentioned by Parker and other American executives.
▪ American’s fleet continues to get younger as the carrier is putting a new plane into service every four days. The airline expects to take delivery of 55 new mainline aircraft and plans to retire 86 mainline aircraft this year. “We continue to make significant investment in our fleet renewal program, which has given the company the youngest and most modern fleet of the U.S. network airlines. By the end of this year we expect the average age of our mainline fleet to fall below ten years, well below any of our network competitors,” American president Scott Kirby said.
▪ The carrier expects the DOT to award Cuba routes to cities that are not Havana sometime soon. American executive vice president of corporate affairs Steve Johnson said Havana routes are likely to be announced sometime this summer.
▪ Fares in the Dallas-Fort Worth area continue to be lower than they were last year as American and Southwest Airlines, which added dozens of new flights at Dallas Love Field, compete for passengers. “It’s a great time if you’re a traveler in Dallas, to get out and go somewhere. There’s some really attractive prices,” Kirby said.