DALLAS – This morning, American Airlines reported a net profit excluding special items of $289 million for the fourth quarter (Q4) of 2016, down 91.2% year-over-year (YOY). For the full year American’s net profit was $2.68 billion, down 64.8% YOY. Excluding special items, the net profit figures were $475 million for Q4 and $3.17 billion for the full year.

American’s revenue for Q4 was $9.79 billion, up 1.7% YOY and $40.18 billion for the full year, down 2.0% YOY. Operating expenses rose 5.4% YOY in Q4, driven primarily by a 17.4% YOY increase in labor expenses to $1.25 billion. For the full year, operating expenses rose a more modest 0.3%, with a 9.8% YOY decline in fuel expenses offsetting a 14.4% YOY increase in labor expenses.

Together, these figures yielded an operating profit of $767 million in Q4, down 28.3% YOY for an operating margin of 7.8%. For the full year, operating profit was down a more modest 14.8% YOY to $5.28 billion, yielding an operating margin of 13.2%.

The results for Q4 were generated on a 0.4% YOY increase in capacity (as measured by available seat miles), and a 1.7% YOY increase for the full year in the same metric. On this basis, the all important unit revenue (PRASM) metric was up 0.2% YOY in Q4 and down 4.3% for the full year.

Airways Senior Business Analyst Vinay Bhaskara live-blogged the American quarterly earnings call for Q4 and full year 2016. His overall take was:

Overall an okay but unspectacular quarter and year for American. Wall Street will party tonight about the positive PRASM, but there are some broader signs of revenue and financial weakness that are popping up throughout the business. American’s labor expense growth is pretty aggressive, and that will take its toll in 2017 and 2018 earnings because American cannot grow enough to offset that given its capacity handcuff. There is a margin gap versus Delta and even now United to an extent, and there are a lot of cost pressures for American to grapple with in the short run. I’m a bull on American’s long run prospects, but bearish on the quarter-to-quarter figures over the next year and a half.

You can read his coverage of the earnings call below via the ReplyAll tool.