American Airlines posted an improved full-year 2023 profit of $822 million on record revenue.

The Oneworld carrier’s operating profit almost doubled to $3 billion in 2023, with revenue jumping 8% in one year to $52.8 billion. American’s $822 million profit for the year compares to its $127 million profit in 2022.

American Airlines (c)

Source: American Airlines

”We are running a historically strong operation,” said American chief executive Robert Isom during an earnings call on 25 January, pointing to improved efficiencies and cost controls. ”We made a commitment to be reliable and profitable, and we… have delivered in a big way. There is much more ahead of us.

“We see robust travel demand,” Isom says, adding that he is ”very encouraged” by business-travel trends.

The airline’s financial performance in the fourth quarter, despite operating profit halving to $656 million and net profit falling to $19 million, and its earnings guidance for 2024 was ahead of analyst projections. American is projecting full-year adjusted earnings per diluted share of between $2.25 and $3.25.

The airline is due to receive 28 aircraft across the year and American chief commercial officer Vasu Raja says demand is running in line with planned 2024 capacity increases. ”Right now we are in-taking revenues in line with capacity; sometimes its [driven by] yield, sometimes its traffic.”

American expects to increase capacity by single-digit percentage levels across the year. It predicts its revenue per available seat mile (RASM) will decline 3.5%-5.5% year on year in the first quarter and to be flat to 3% down for all of 2024.

Raja sees ”improving trends as we move through the year” and is optimistic about the airline’s short-haul domestic business – which accounts for around three-quarters of activities. ”We see the entirety of our short-haul business turning [RASM] positive by the end of Q1.”

The airline will host an investor day in March to lay out its longer-term plans. Isom says American’s focus on “reliability, profitability and paying debt down” over the past two years left it in a ”really good spot to talk about what is next”.