American Air Tells Analysts It Needs to Get Passengers to Buy More Expensive Seats
Photo Credit: American Airlines want to increase revenues in part by up-selling more customers to better seats. Pictured is American's international premium economy product. American Airlines Group
Skift Take
Delta Air Lines and United Airlines recently told investors they're making big revenue from premium-seat upsells. Not surprisingly, American wants a piece of that action. But it has some IT work to do first.
American Airlines reported the best third-quarter revenues in its history on Thursday, at $11.6 billion, but executives admitted they still trail their two biggest competitors when it comes to wringing extra cash from each passenger.
For all three of the major global U.S. airlines, "Fuel prices have gone up about the same as a percentage of expense," American CEO Doug Parker told analysts on the airline's third quarter conference call. "So [if] the question [is], ... why have your earnings fallen more, it is because our revenues haven't gone up as much."
Parker pledged to fix that gap Thursday, as American outlined plans to increase revenues by $1 billion next year, while reducing costs by $300 million.
Investors, who have been selling off the stock for much of this year, seemed to like it, pushing the price up more than $2.50 per share by 1:30 p.m. in New York. This occurred even after American reported third-quarter net profit of $341 million, a decline of 48 percent-year-ov
