MIAMI — American Airlines President Scott Kirby said that although 2014 was a great year for the carrier, 2015 will be harder as it goes through major parts of it integration with US Airways in remarks yesterday at the JP Morgan Aviation, Transportation and Industrials conference yesterday.
“We earned $4.2 billion in 2014, and was close to a 10 percent pre-tax margin. We’ve been successful in reducing our costs of liquidity,” sad Kirby. “Our mainline cabin upgrades continues. We have new labor deals in place and we’re glad to share the success of the airline with our 100,000 workers.”
American is continuing to aggessively manage costs, just like it did when it didn’t make $4.2 billion, said Kirby. “In terms of our integration, we’re off to a great start. We got five-year deals done with our pilots and flight attendants,” he said. “It didn’t happen without some bumps, but we got it done.”
But 50 percent of flight attendants and 35 percent of pilots voted no, Kirby observed. “So that tells us that we still have work to do. We have more agreements coming and the process is ongoing,” he said.
2015 is the year American goes to a single reservations system and frequent-flyer program, said Kirby, noting the airline is already operating under a single system for cargo. “We’re confident that the process we have in place makes us hopeful that the single reservation and frequent-flyer mergers can get done,” he said. “We will move to the single reservations system in the fourth quarter and the frequent-flyer system in the second quarter.”
Another big event for American Airlines is moving to a single operating certificate, said Kirby. “We’ve completed eight of the nine phases and hope to get it done in April,” he said. “It’s a huge accomplishment, and we give kudos to the team who got it done. We’re almost there.”
Thanks to record earnings, American Airlines can invest in its product, said Kirby. “We took deliver of 132 new aircraft in 2014, and most of them were replacements as we continue to retire MD-80s, Boeing 767s and regional jets,” he said. “We’re aggressively investing in our widebodies. All our international jets will have fully lie-flat seats, but it will take awhile to get there.”
Kirby called American’s transcon Airbus A321s the “best product in the air,” with passengers and corporate accounts loving it. “We’re making further investments in our premium product. Our [oneworld] partners British Airways and Japan Airlines have taught us a lot because they have a lot of experience with premium customers,” he said. “There are markets where passengers will pay a premium for a better experience.”