American Airlines slumping on time performance

After a summer in which American Airlines’ on-time performance and
cancellations took a precipitous dip, the carrier said it will improve

“We know that we must be better, and we will,”
American president Robert Isom said during the company’s third-quarter earnings
call Thursday. 

American’s on-time performance, including American
Eagle-branded flights that are flown by regional carriers, was 72.4% in July (the
last month for which the DOT has released statistics) and 72.4% in June. Those
numbers placed the airline seventh and eighth, respectively, in on-time
performance among the 10 carriers the DOT tracks in its monthly Air Travel
Consumer Report. They were also markedly behind American’s year-to-date on-time
performance through July of 77.2%.

Meanwhile, the cancellation rate for American and American
Eagle flights was 3% in July, ninth place in the ranking. 

During Thursday’s call, Isom said the drop was partially a
result of inclement weather in Dallas. But he said it was also caused by a
variety of other factors, including engine changes that American had to take
with new aircraft deliveries and FAA-mandated engine fan blade inspections (the
FAA’s response to the failure in April of a fan blade on a Southwest plane). 

Still, Isom said American needs to improve its operational
planning in order to be ready for the peak season and have aircraft property
staged at the start of the day.

He offered one way in which the carrier’s operations have
already grown simpler. This month, American completed the integration of its
27,000 flight attendants into one system. That means flight attendants who became
part of the company as a result of American’s acquisition of U.S. Airways in
2013 can now work in all aircraft that American flies. Previously, each
attendant could only work on their legacy carrier’s aircraft. 

With the integration, American has more scheduling
flexibility, which will decrease recovery time in the case of irregular
operations, Isom said.  

He added that the change is already paying dividends. American’s
cancellation rate is less than 1% thus far in October. 

American reported net income during the third quarter of
$341 million, down 48.4% year over year. The decline was driven by a 12.4%
increase in costs, due largely to a nearly $700 million increase in fuel

But American also underperformed on revenue growth relative
to competitors Delta and United. The carrier recorded total operating revenue
of $11.56 billion in the third quarter, up 5.4% from last year and in line with
analyst expectations, according to the website Seeking Alpha. By comparison,
United’s revenue was up 11.2% this quarter and Delta’s jumped 8%.

American CEO Doug Parker said the carrier expects to
increase revenue by $1 billion next year via initiatives that include include
changes to American’s international network, the introduction of more widebody
aircraft equipped with premium economy cabins, and the introduction of
additional narrowbody aircraft configured with more seats. 

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