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BUSINESS A25
Saturday 30 January 2016
American Airlines posts record profit for 4Q, all of 2015
DAVID KOENIG on planes, he didn’t expect were inflated by a huge FactSet forecast. $6.3 billion, also a record.
AP Airlines Writer it to be as damaging to accounting gain from a tax But American more than Parker, the CEO, said it was
FORT WORTH, Texas (AP) — the airline industry as past item. offset the $530 million more than any airline had
American Airlines reported outbreaks such as the Without that and other decline in revenue with ever earned.
a record profit for the respiratory disease SARS in one-time gains and losses, savings of nearly $1.1 billion If there was any worrisome
fourth quarter and all of 2003. American said it earned — 41 percent — on jet fuel. note in the report for
2015 as a sharp drop in CEO Doug Parker added $1.3 billion or $2 per share, The steep drop in oil prices American’s employees and
fuel prices more than offset that Zika “only has an compared with $1.1 billion, since mid-2014 has been a investors — but welcome
lower revenue. impact on pregnant or $1.52 per share, a year boon to airlines. They have news for passengers — it
The world’s biggest airline was further evidence that
said Friday that its earnings An American Airlines flight taxis at Seattle-Tacoma International Airport in Seattle. American airfares are falling.
were the highest ever for reports financial results Friday, Jan. 29, 2016. American did not disclose
any carrier. American is its average fare. However,
poised for another big year: (AP Photo/Ted S. Warren) in the fourth quarter,
airline officials said they passengers flew 3.8
expect to save another $2 women, not the entire earlier. passed some of the savings percent more miles than
billion on fuel in 2016. traveling public.” That was still a record on to consumers in lower a year earlier but paid 8.9
American executives said The comments from Kirby and beat Wall Street fares but kept much of it. percent less per mile, a sign
the outbreak of the Zika and Parker echoed those expectations. The average For all of 2015, American of lower prices. Investors
virus and a government of a JetBlue executive, who estimate of nine analysts earned a record $7.6 billion. prefer to look at how much
warning to pregnant said Thursday that his airline surveyed by Zacks Even excluding the tax passengers pay for every
women about traveling did not see a measurable Investment Research was gain, adjusted profit was seat flown one mile — that
to Latin America and the effect on trip bookings or for earnings of $1.96 per accounts for unsold seats
Caribbean seemed to refunds. share, and 15 analysts — and that figure also fell
be having no effect on American Airlines Group surveyed by FactSet by 6 percent.
their business. Inc. posted net income of predicted $1.97 per share. The fourth-quarter and
Like other airlines, American $3.28 billion in the fourth Revenue fell 5.2 percent to 2015 net income included
says it will give refunds or quarter, but the results $9.63 billion, matching the a $3 billion credit because
rebook pregnant women American reversed a tax-
who were planning trips valuation now that it is
to areas affected by the making money after huge
virus, which has been losses in earlier years. Delta
linked to birth defects in and United have made the
Brazil. American officials same accounting change.
said they didn’t know how With or without the tax
many customers have credit, 2015 was a record
asked for refunds, but year for American.q
airline president Scott Kirby
said “it has not been a
meaningful number.”
Kirby said that because the
mosquito-borne virus is not
transmitted through the air
Falling oil prices push Chevron to post loss
DAVID KOENIG now for oil facilities, with nations could restore the
AP Business Writer too many for-sale signs. market to balance this
DALLAS (AP) — Chevron The company has sold off year. But until that happens,
suffered its first money- $11 billion worth of facilities he said, prices will stay low
losing quarter since 2002 such as pipelines over the “and the financial damage
in the final three months of past two years and hopes to the energy sector seen
last year, as plunging crude to raise up to $10 billion in 2015 will continue.”
prices chopped more than more with sales through Watson said Chevron is
one-third from its revenue. 2017. Company executives managing through the
Oil traded this month at say, however, that they downturn by cutting
levels not seen since 2003, won’t unload assets at fire- spending and investment
although it has rebounded sale prices just to get rid of — it cut fourth-quarter
slightly in the last few days. them. spending by about $9
Cheaper energy is great Oil prices are down billion compared with a
for consumers, who save because growth in demand year earlier. He said the
with every fill-up, but oil- has slowed and cannot company will finish projects
producing nations and big absorb a glut of oil on the under construction but
exploration companies like market. On a conference won’t start new long-
Chevron and Exxon are call with analysts, Chevron term projects and will be
paying the price. CEO John Watson said he judicious with short-term
Chevron is cutting thinks energy demand will ones.
spending, laying off grow but that supply is a San Ramon, California-
workers, and looking to sell wild card. based Chevron Corp.
even more of its assets. The Watson pointed to forecasts reported Friday that it lost
problem with that strategy: that predict increasing cuts $588 million in the fourth
It’s a buyer’s market right in production by non-OPEC quarter. q
