For the third quarter of the year, American Airlines sees profits rise by 87% because of the plummeting fuel costs.
The world’s biggest airline based on passenger traffic earned a third-quarter profit that amounts to $942 million with a combined net income of American and US Airways last year of $505 million. American Airlines and US Airways have merged since December of 2013.
The total operating expenses of the company went up by 3.5% which equals to $9.9 billion as it benefited from the lower jet fuel costs and American Airlines doesn’t hedge jet fuel price which its peers are doing thus plummeting fuel costs directly increases its net income.
American Airlines disclosed that fuel costs went down by 1.3% for the third quarter versus the costs of the merged companies last year. The airline also added that revenue for the latest quarter revenue is 1% higher compared to that of 2013.
No forecasts for the remaining months of 2014 was provided by the American Airlines Group but Doug Parker, the company’s Chief Executive Officer mentioned in a statement that he’s expecting to record profits for the last quarter and the entire year.
In 2013, American Airlines rose from bankruptcy and completed its $11 billion merger with US Airways in December to form the biggest airline in the world and operated under the name American Airlines Group.