I wrote last fall about how American Airlines was losing money flying passengers and also covered earlier in the year how all of their profit was accounted for by the AAdvantage frequent flyer program. American Airlines makes money selling frequent flyer miles to banks.
This was notable because it underscored just how badly the passenger operation was performing financially. The success of the frequent flyer program was hiding the losses of the airline business. However the airline’s financials made it possible to separate out these different components of their business.
It’s notable then that American finally made money from flying passengers in the second quarter. The last several quarters American has reported that their costs were greater than passenger revenue + cargo revenue. Their entire profit was accounted for by selling frequent flyer miles to banks. However in the second quarter American made money flying.
- Passenger revenue per available seat mile: 15.22 cents
- Cost per available seat mile: 14.94 cents
- Available seat miles: 72,322,000,000
[…] Airlines Loses Money Flying, All Profit Comes From Frequent Flyer Miles. Although more recently: Congratulations: American Airlines Finally Made Money Flying Passengers in the Second Quarter. With the greater demand, airlines have been able to command higher prices, since less seats have […]