Tag Archives: Boeing 737-800 WL

American Airlines Group reports its first quarter results

American Airlines Boeing 737-800 WL N315PE (msn 31261) MIA (Jay Selman). Image: 403713.

American Airlines Group Inc. today reported its first quarter results, including these highlights:

  • Reported a first-quarter 2018 pre-tax profit of $273 million, or $468 million excluding net special items1, and a first-quarter net profit of $186 million, or $357 million excluding net special items
  • First-quarter 2018 earnings were $0.39 per diluted share, or $0.75 per diluted share excluding net special items
  • 2017 earnings were $3.90 per diluted share, or $4.88 per diluted share excluding net special items. Fourth-quarter earnings were $0.54 per diluted share, or $0.95 per diluted share excluding net special items
  • Returned $498 million to shareholders, including the repurchase of 8.4 million shares and dividend payments of $48 million. Announced a new $2.0 billion share repurchase authorization2 to be completed by December 31, 2020

“American’s team members continue to deliver solid results, including record first quarter revenue performance. Higher fuel prices led to a decline in year-over-year earnings, but we are excited about the future,” said Chairman and CEO Doug Parker. “With the youngest fleet in the industry among our large network peer competitors, a significantly improved product, and a team of 130,000 who demonstrate extraordinary care for our customers, we are well positioned for long-term success.”

First-Quarter Revenue and Expenses

Pre-tax earnings excluding net special items for the first quarter of 2018 were $468 million, a $193 million decrease from the first quarter of 2017.

GAAP Non-GAAP 1
1Q18
1Q17
1Q18
1Q17
Total operating revenues ($ mil) $  10,401 $   9,820 $  10,401 $   9,820
Total operating expenses ($ mil)   9,970   9,083   9,775   8,962
Operating income ($ mil)   431   737   626   858
Pre-tax income ($ mil)   273   535   468   661
Pre-tax margin 2.6 % 5.4 % 4.5 % 6.7 %
Net income ($ mil)   186   340   357   414
Earnings per diluted share $   0.39 $   0.67 $   0.75 $   0.82

 

Robust demand for air travel drove a 5.9 percent year-over-year increase in first-quarter 2018 total revenue, to a first quarter record $10.4 billion. Passenger revenue per available seat mile (PRASM) grew in all geographic regions, with notable strength in Latin America. Cargo revenue was up 18.8 percent to $227 million due primarily to a 10.9 percent increase in volume and a 7.1 percent increase in cargo yield. Other revenue was up 10.0 percent to $694 million. First-quarter total revenue per available seat mile increased by 3.5 percent compared to the first quarter 2017 on a 2.3 percent increase in total available seat miles. This marks the sixth consecutive quarter of positive unit revenue growth and the second quarter in a row where all geographic regions showed PRASM growth on a year-over-year basis.

Total first-quarter 2018 operating expenses were $10.0 billion, up 9.8 percent year-over-year driven by a 25.7 percent increase in consolidated fuel expense. Had fuel prices remained unchanged versus the first quarter 2017, total expenses would have been $412 million lower. Total first-quarter 2018 cost per available seat mile (CASM) was 15.15 cents, up 7.3 percent from first-quarter 2017. Excluding fuel and special items, total first-quarter CASM was 11.57 cents, up 2.8 percent year-over-year.

“We made significant progress on several key initiatives during the first quarter, including fleet simplification and adding more travel options for customers by expanding Basic Economy,” said President Robert Isom.

“Our recently announced order for 47 Boeing 787s enables the retirement of older aircraft, including the Airbus A330-300, the Boeing 767, and certain Boeing 777-200s. These replacement aircraft will provide improved fuel efficiency, lower maintenance costs, greater range, and an enhanced customer experience.

“In April, we launched trans-Atlantic Basic Economy together with our Atlantic partners. Basic Economy is now rolled out in the U.S. and certain markets in Mexico and the Caribbean. We continue to look for more opportunities to launch this popular travel option for our customers,” Isom said.

Strategic Objectives

American Airlines is focused on four long-term strategic objectives: Create a World-Class Customer Experience, Make Culture a Competitive Advantage, Ensure Long-Term Financial Strength, and Think Forward, Lead Forward.

Create a World-Class Customer Experience

American is committed to delivering a world-class product by creating value and building trust with customers, driving operational excellence, and strengthening its network, especially where the company has a competitive advantage. During the first quarter, American:

  • Filed an application along with Qantas to the U.S. Department of Transportation seeking approval to form a joint business to better serve customers flying between North America and Australia and New Zealand. The proposed joint business will significantly improve service and stimulate demand, and is expected to unlock more than $300 million annually in consumer benefits that are not achievable through any other form of cooperation
  • Enhanced the travel experience between New York LaGuardia and Chicago for business customers by adding that route to the company’s shuttle portfolio. The shuttle is highly valued by top business customers and offers an hourly schedule and dedicated gates and check-in areas
  • Expanded Basic Economy to its first trans-Atlantic routes on April 11, including Dallas/Fort Worth-London Heathrow, giving customers a new option for American’s lowest fares in partnership with American’s Atlantic joint business partners
  • Introduced new wine sommelier Bobby Stuckey to lead American’s wine program, selecting premium wines for customers to enjoy in Admirals Club lounges, Flagship Lounges, Flagship First Dining and in flight
  • Introduced new meals on certain Pacific flights. Japan Airlines’ Chef Jun Kurogi has designed a traditional Japanese meal in premium cabins on flights from Tokyo, and Chef Sean Connolly has designed dishes for premium cabins on flights from Auckland and Sydney

Make Culture a Competitive Advantage

American is creating an environment that cares for frontline team members, provides competitive pay, and equips its team with the right tools to support its customers. During the first quarter, American:

  • Hosted 7,000 American Airlines leaders at its Annual Leadership Conference in Dallas. Team members who oversee people spent a full day learning about American’s four strategic objectives and how to implement them in partnership with their teams
  • Honored 103 team members at the company’s Annual Chairman’s Award celebration in Dallas earlier this month. The Chairman’s Award is the airline’s highest recognition, and recipients this year were recognized for accomplishments including making complicated maintenance tasks easier and safer, caring for colleagues during personal tragedies, and making customers feel like family
  • Accrued $29 million for the company’s 2018 profit sharing program during the quarter
  • Completed the transition to a new cloud-based HR information system which provides seamless integration of team member data and hiring, onboarding, compensation and performance-related tasks. In April, American also implemented a new payroll system for U.S.-based management and support staff, with the remaining team members to transition on a phased basis

Ensure Long-Term Financial Strength

American is focused on capturing the efficiencies created by the merger, delivering on its earnings potential, and creating value for its owners. In the first quarter, American:

  • Returned $498 million to shareholders through share repurchases and dividends, bringing the total since mid-2014 to $11.9 billion. These repurchases have reduced the share count by 38 percent to 467.4 million shares as of March 31, 2018
  • In April, announced an order for 47 new Boeing 787 widebody aircraft consisting of 22 787-8s scheduled to begin arriving in 2020 and 25 787-9s scheduled to begin arriving in 2023. The 787-8s will replace American’s Boeing 767-300s, while later 787-9 deliveries will replace Airbus A330-300s and older 777-200 widebody aircraft. In addition, American deferred 40 737 MAX aircraft and 3 Airbus A321neo aircraft. These changes better align future aircraft deliveries with planned aircraft retirements and reduce planned capital expenditures by approximately $200 million in 2019 and $800 million in 2020
  • On April 26, 2018 declared a dividend of $0.10 per share, to be paid on May 22, 2018, to stockholders of record as of May 8, 2018

Think Forward, Lead Forward

American is committed to re-establishing itself as an industry leader by creating an action-oriented culture that moves quickly to bring products to market, embraces technological change, and quickly seizes upon new opportunities for its network and product. In the first quarter, American:

  • Reached a new lease agreement with the city of Chicago that clears the way for an $8.5 billion redevelopment plan at O’Hare that includes more gates, a better structure for connecting travelers, and a better overall customer experience that will help close the competitive gate gap there
  • Reached an agreement earlier this month to get access to 15 additional gates in DFW Terminal E. This allows the company to significantly grow departures at its largest hub to more than 900 per day, enabling more customers to access our global network
  • Completed all customer-facing renovations in Terminal B, where American’s regional operation at Dallas/Fort Worth is located
  • In April, opened five new gates at Chicago O’Hare Terminal 3, permitting American to provide improved service to its customers at this key competitive hub

Guidance and Investor Update

American expects its second-quarter 2018 TRASM to increase approximately 1.5 to 3.5 percent year-over-year, which reflects expected continued strength in demand for both business and leisure travel. The company also expects its second-quarter 2018 pre-tax margin excluding special items to be between 7.5 and 9.5 percent.3 Due to higher fuel prices included in the guidance provided today, American now expects its 2018 diluted earnings per share excluding net special items to be between $5.00 and $6.00.3

Notes

  1. In the first quarter, the company recognized $195 million in net special items before the effect of income taxes. First quarter special items principally included $82 million of fleet restructuring expenses and $59 million of merger integration expenses. See the accompanying notes in the Financial Tables section of this press release for further explanation, including a reconciliation of all GAAP to non-GAAP financial information.
  2. Share repurchases under the buyback program may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades or accelerated share repurchase transactions. Any such repurchases will be made from time to time subject to market and economic conditions, applicable legal requirements and other relevant factors. The program does not obligate the company to repurchase any specific number of shares or continue a dividend for any fixed period, and may be suspended at any time at the company’s discretion.
  3. American is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of special items cannot be determined at this time.

Copyright Photo: American Airlines Boeing 737-800 WL N315PE (msn 31261) MIA (Jay Selman). Image: 403713.

American Airlines aircraft slide show (Boeing):

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EgyptAir supports the Egyptian Football Team with a new logo jet

EgyptAir's 2018 National Football Team special livery

EgyptAir received the pictured new Boeing 737-800 SU-GEN on December 8, 2017. The new airliner has now been painted in a special Egyptian Football Team livery in support of the national team (below).

This morning, the aircraft departed Cairo as flight 4 from Cairo International Airport, heading to the city of Zurich, Switzerland, to engage in friendly games with the Greek team in preparations for Russia 2018.

The team will return from Zurich on the morning of March 28 where is seen heading back to Cairo (top).

EgyptAir is the Official Carrier for the Egyptian National Football.

Top Copyright Photo (all others by EgyptAir): EgyptAir Boeing 737-800 WL SU-GEN (msn 63806) (Egyptian National Football Team) ZRH (Andi Hiltl). Image: 941291.

EgyptAir aircraft slide show:

Video:

Ukraine International to launch two new German routes

Delivered on April 3, 2017

Ukraine International Airlines (Kiev) is launching two new routes to Germany in June and July. The flag carrier of the Ukraine will twice-weekly Boeing 737-800 service between Odessa and Hahn (near Frankfurt) on June 14. This will be followed by Odessa – Berlin (Schoenefeld) on July 4 according to Airline Route.

In other news, UIA received a another Boeing 737-800. The aircraft passed an official registration procedure in Ukraine and received the UR-PSZ registration number (above). The aircraft accommodates 186 passengers in two-class seating configuration. UIA expects to operate Boeing 737-800 NG across its medium-haul route network. The UR-PSZ is scheduled to start operating commercial flights in February 2018.

Produced in 2009, the UR-PSZ aircraft is leased from Dubai Aerospace Enterprise (DAE), one of the world’s largest lessors that came seventh by fleet size in 2017.

“Finally, we have received the UR-PSZ aircraft and, therefore, collected the whole UR-PS registration series alphabet. The new aircraft is fully reconfigured to comply with UIA standards, equipped with new Business Class and Economy Class seats, as well as new catering equipment, – noted Evgeniya Satska, UIA Communications Director. – This year, we will keep enhancing and renewing our fleet, expanding our flight geography, and increasing frequencies on a number of routes. In 2018, we expect to set a record and carry as many as 8 million passengers.”

UIA operates 42 aircraft including 27 medium-haul Boeing 737 NG aircraft. Currently, UIA fleet’s average age amounts to 11.8 years.

Top Copyright Photo (all others by UIA): Ukraine International Airlines Boeing 737-800 WL UR-PSW (msn 41536) AYT (Ton Jochems). Image: 939724.

Ukraine International aircraft slide show:

American takes delivery of the last Boeing 737-800, the fleet is now repainted

The last Boeing 737-800 built for American Airlines

American Airlines (Dallas/Fort Worth) took delivery of the last Boeing 737-800 (the pictured N359PX above) on December 12, 2017. All future 737 deliveries will be for the new Boeing 737-8 MAX 8 (below). The entire Boeing 737-800 fleet has now been repainted, except one which will be preserved in the 1968 “tri-color” livery as a legacy jet (see bottom photo).

This brings the Boeing 737-800 fleet to 304 aircraft.

Top Copyright Photo: American Airlines Boeing 737-800 WL N359PX (msn 31280) BFI (Brandon Farris). Image: 940382.

American Airlines – Current Livery – Boeing:

Below Copyright Photo: American Airlines Boeing 737-8 MAX 8 N308RD (msn 44446) BFI (Joe G. Walker). Image: 940368.

MAX 8, first flight on December 13, 2017

Meanwhile AA will add three new Boeing 737-8 MAX 8 routes from the Miami hub in the spring according to Airline Route:

Miami – Boston daily from April 3, 2018
Miami – Puerto Plata daily from April 3, 2018
Miami – Quito daily from March 25, 2018

Bottom Copyright Photo: American completed the repainting of the Boeing 737-800 fleet into the 2013 flag livery in December 2017. The pictured N921NN has been repainted into the 1968 “tri-color” livery. The “AA” logo on the tail was designed by Massimo Vignelli, who also produced the famous New York City Subway Map. N921NN will be preserved in this livery as a “legacy livery” logo jet. American Airlines Boeing 737-823 WL N921NN (msn 33229) (heritage livery) FLL (Andy Cripps). Image: 940311.

Repainted but will be retained in the 1968 heritage livery

Video:

Meet the new JTA “Sakura Jinbei” jet

JTA's 2017 "Sakura Jimbei" (pink) jet

On December 16, 2017, JTA’s next Boeing 737-800, registered as JA06RK (msn 61480), successfully operated its first flight from Renton, WA.  The new logo jet is painted in the pink Whale Shark livery, known in Japan as “Sakura Jinbei”.

The new Boeing 737-800 is expected to replaced the original “Sakura Jinbel” which has been operating on this Boeing 737-400 registered as JA8992:

Japan Transocean Air-JAL Boeing 737-446 JA8992 (msn 27917) (Sakura Jimbei) HND (Akira Uekawa). Image: 921975.

Above Copyright Photo: Japan Transocean Air-JAL Boeing 737-446 JA8992 (msn 27917) (Sakura Jimbei) HND (Akira Uekawa). Image: 921975.

The pink female companion (with a baby Whale Shark underneath), “Sakura Jimbei” was unveiled by Japan Transocean Air on January 5, 2014 on the Naha, Okinawa to Miyako route.

The two Jimbei (Whale Shark in Japanese) logo jets are in support of Okinawa’s Churaumi Aquarium and the first in captivity birth and rearing of a Whale Shark. JA8992 also wears a Formosan cherry blossom by the front door.

JTA is phasing out its fleet of Boeing 737-400s in 2018 and replacing them with the newer Boeing 737-800s.

Top Copyright Photo (all others by JTA): Japan Transocean Air-JAL Boeing 737-800 WL JA06RK (msn 61480) (Sakura Jimbei) BFI (Joe G. Walker). Image: 940332.