American Airlines Will Never Lose Money Again, Says CEO Doug Parker

american airlinesDoug Parker, chairman and CEO of American Airlines Group Inc., says the world’s biggest airline will never lose money again – thanks to less competition from industry consolidation, better logistics and new types of fee-based products and services.

Parker told analysts in September that the Fort Worth-based airline was on track to earn $19.2 billion in pretax income from 2014 to the end of 2017. Quite a feat, considering that from 1978 through 2013, American’s cumulative profit was $1 billion. Even in a bad year, Parker says the airline should earn about $3 billion in profit before taxes.

The company’s latest earnings report didn’t disappoint. American posted better-than-expected fourth-quarter earnings and higher revenue of $10.6 billion, up from $9.8 billion in the last three months of 2016.

“We enter 2018 with strong momentum,” Parker says. “Demand for American’s reliable, friendly service remains strong, our network is expanding, and the products we are bringing to market are resonating with customers.”

As part of the company’s commitment to launch new products, embrace technological change and “quickly seize upon new opportunities,” American in 2017 announced a $200 million equity stake in China Southern Airlines; executed an amended trans-Atlantic joint business agreement, strengthening the company’s relationship with other key global partners; adopted next-generation technology such as cloud hosting and machine learning to speed time to value; announced a commitment for more than $1.6 billion for improvements of LAX Terminals 4 and 5; and built a five-gate expansion at Chicago O’Hare Terminal 3.

Parker has also detailed the company’s plan to increase revenue by $3.9 billion over the next four years through new deals with credit card companies, more seats on planes and other measures.

“As an airline, we will always operate in a just-in-time environment, however, we recognize we must lead for the long term,” Parker says. “This means we must be more nimble in our problem solving and in how we innovate and develop the right products, technology, and network both for customers of today and the future.

“Ultimately, all of this work will produce a company built for the long term, led by a team that thinks long-term, sees the potential of future opportunities, and brings innovative concepts to market quickly and efficiently,” he says.

He’s No. 67 on Chief Executive and RHR International’s CEO1000 Tracker, a ranking of the top 1,000 public/private companies.

Doug Parker, CEO, American Airlines

Headquarters: Fort Worth, TX

Age: 57

Undergraduate degree: Albion College

Graduate degree: Vanderbilt University

First position with company: Financial analyst

First joined company: 1986

Named CEO: 2013

Katie Kuehner-Hebert
Katie Kuehner-Hebert has more than two decades of experience writing about corporate, financial and industry-specific issues. She is based in Running Springs, Calif.

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