Page 10 - AAA 24 OCT 2015
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BUSINESS A25
Saturday 24 October 2015
American Airlines 3Q profit soars high on cheaper jet fuel
DAVID KOENIG to provide more details. plans as executives dis- profits — before they re- span the globe.
AP Airlines Writer Kirby also said that Ameri- cussed the company’s re- covered most of the loss. But discounters, which in-
FORT WORTH, Texas (AP) — can will change its AAd- cord-breaking third-quarter Spirit’s stock took a bigger clude Mexico’s Volaris and
American Airlines plans to vantage frequent-flier pro- profit. hit — it fell 9 percent dur- Norwegian Air Shuttle, are
offer a version of the low- gram next year, but he American Airlines Group ing intraday trading. Fron- growing rapidly by appeal-
fare, no-frills approach to ing to consumers who want
flying that is boosting profit This photo shows the tails of four American Airlines passenger planes parked at Miami Interna- to fly as cheaply as pos-
margins at discount carri- tional Airport, in Miami. American Airlines reported quarterly financial results Friday, Oct. 23, 2015. sible.
ers. Spirit has been possibly the
Officials at American, the (AP Photo/Alan Diaz) most successful of the so-
world’s biggest airline, say called ultra-low-cost carri-
they need to fight back declined to give details Inc. reported that net in- tier shares are not publicly ers in the U.S. It draws the
against small but fast-grow- on that either. Other air- come jumped 80 percent traded. highest rate of complaints
ing rivals including Spirit Air- lines have changed their to $1.69 billion thanks to a Big airlines like American, among airlines tracked by
lines and Frontier Airlines, plans from miles to points huge drop in fuel spending. Delta and United chase the federal government —
which are known for cheap — a way of rewarding high But American’s shares fell high-dollar business trav- followed closely by Frontier,
fares, lots of extra fees, and spenders at the expense of 4.7 percent — apparently elers with amenities such which began imitating Spir-
poor service. customers who buy cheap on concern that price-cut- as lie-flat seats and fancy it’s no-frills approach last
American has many fre- tickets. ting to compete with Spirit food in premium cabins year — but has had higher
quent fliers who will pay American disclosed its and Frontier might erode and route networks that profit margins than the gi-
more for premium service, ants.
said Scott Kirby, the airline’s When other airlines decid-
president. ed not to match Spirit’s low
But 87 percent — account- fares, it grew to become
ing for half of American’s bigger than United or Del-
revenue — fly the airline ta in Dallas-Fort Worth and
no more than once a year, bigger than Delta in Chica-
and they buy airline tickets go, Kirby said.
based on price, he said. American isn’t the only big
“We have to compete airline worried about the
for them,” Kirby said. “We low-cost outfits. Late last
can’t just walk away from year, Delta Air Lines began
that size of the business.” selling a “basic economy”
So beginning next year ticket that doesn’t allow
American will offer tickets seat selection or ticket
with “less frills” but a “re- changes and may not offer
ally cheap price” where full frequent-flier benefits.
it competes on nonstop It was introduced in a few
flights with discount carri- markets and seen as a re-
ers, Kirby said. He declined sponse to Spirit.q
Twitter CEO gives up $200M in stock for company employees
MICHAEL LIEDTKE San Francisco company. Twitter co-founder Jack Dorsey speaks in St. Louis. According to social networking service
AP Technology Writer “I’d rather have a smaller a Friday, Oct. 23, 2015 regulatory filing, Dorsey is relinquishing has 1.5 billion users, even
SAN FRANCISCO (AP) — Af- part of something big than stock worth more than $200 million so the messaging service though it is only two years
ter laying off more than 300 a bigger part of something can award the shares to its employees. older than Twitter.
workers, Twitter CEO Jack small,” Dorsey tweeted Dorsey was Twitter’s origi-
Dorsey is trying to lift the about surrendering some (Robert Cohen/St. Louis Post-Dispatch via AP) nal CEO, but was ousted
spirits of the remaining em- of his stock. “I’m confident because the company’s
ployees by giving them 6.8 we can make Twitter big!” Dorsey, one of its co-found- vice more appealing be- board didn’t think he was
million shares of the stock Twitter said Dorsey’s shares ers, as its CEO in hopes that yond its core audience of the right leader at that
he owns in the online mes- will be earmarked for stock he can figure out a way to about 300 million users. By time.
saging service. issued to employees next make the messaging ser- comparison, Facebook’s While he tries to re-tool Twit-
Dorsey is giving up the year under the company’s ter, Dorsey is also serving as
stock, currently worth more incentive plan. CEO of Square, a payment
than $200 million, so Twitter Dorsey will still own 15 mil- processor that is preparing
can award the shares to lion Twitter shares worth to price an initial public of-
its employees, according about $460 million, based fering of its stock.
to documents filed Friday on Twitter’s current market Dorsey has given back
with the Securities and Ex- value. nearly 15.1 million shares
change Commission. Twitter’s stock gained of Square stock during the
The gesture comes a week $1.13, or nearly 4 percent, past two years, too, ac-
after Dorsey laid off 8 per- to close Friday at $30.28. cording to Square’s IPO
cent of Twitter’s workforce The shares have declined documents. He remains by
in an effort to make the by 40 percent in the past far Square’s largest share-
company profitable for six months amid concerns holder with a 24 percent
the first time in its nine-year about Twitter’s slowing stake in that San Francisco
history. The gift represents user growth and inability to company, which is located
nearly one-third of the make money. a block away from Twitter’s
stock Dorsey owns in the Twitter Inc. brought back headquarters.q
