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American Airlines (Nasdaq: AAL) | Company Profile, History, Competitors




American Airlines (NASDAQ: AAL) is the world's largest airline as measured by revenues following the merger with US Airways in 2013. Despite a turbulent past, American's profitability has significantly improved in recent years, along with the rest of the industry.

American Airlines operates ten hubs in the United States located out of Dallas/Fort Worth, Charlotte, Chicago, Philadelphia, Miami, Phoenix, Washington DC Los Angeles, New York–JFK, and New York–LaGuardia. American Airlines also operates internationally as part of the OneWorld alliance with British Airlines, Iberia and Finnair.

Business Overview

American Airlines is focused on large hub operations in Dallas, Los Angeles, Philadelphia, New York, Chicago, Washington DC, Charlotte, Miami and Phoenix. American also relies on connecting smaller cities through leveraging its hub operations. Compared to other airlines, American maintains the least amount of international exposure.
  • Domestic (70% of Revenues): Domestically, American is strong in the Northeast (New York, Philadelphia, Washington). On the West Coast, American has a large hub in Los Angeles and Phoenix. American is weakest in the Pacific Northwest.
  • International (30% of Revenues): Due to its limited international exposure, American relies on its relationships with Oneworld partnerships. It is strong in London through its joint venture with British Airways. It is also one of the largest carriers to Latin America.

Fleet

American operates a fleet of 930 mainline aircraft and 605 regional aircraft at end of 2016. American expects to replace some fleet with new Boeing and Airbus models. American expects all new aircraft deliveries are slated as replacement.

Fuel Hedging

Ever since the US Airways, American does not hedge for fuel costs. American views fuel hedging as too expensive.

Management

WIlliam Parker (CEO): William Parker has been with American Airlines since 2013. Previously, he was CEO of US Airways. Prior to that, he was CEO of American West Airlines.

Derek Kerr (CFO): Derek Kerr has been with American Airlines since 2013. Previously, he was CFO of US Airways. Prior to that, he was CFO of American West Holdings.

Financials

 $ USD in millions     2013     2014  2015  2016  2017
 Revenues  $26,743  $42,650  $40,990  $40,180  $42,207 
 Operating Profit   $1,399  $4,249   $6,204   $5,284   $4,058 
 Net Income  ($1,834) $2,882  $7,610   $2,676   $1,919 
 EPS  ($6.54)  $4.02   $11.39   $4.85   $3.92