Partnerships and AAdvantage Growth Highlight American’s 2021 Second Quarter

Image Source: American Airlines

American Airlines is the second airline to post positive growth for the first time in over a year, reporting a net profit of $19 million in the second quarter of 2021. The carrier credits their new domestic partnerships with Alaska Airlines and JetBlue along with growth in the AAdvantage program for their strong results.

American Airlines is the second carrier to post a positive financial result for the second quarter of 2021, reporting a net profit of $19 million on a revenue of $7.5 billion. The carrier announced their financial performance in a press release and conference call on Thursday, July 22, 2021.

New Partnerships, Growth in AAdvantage Program Provides Future Hope

Although the net profit is positive, not all the numbers were entirely encouraging. When excluding net special items, the carrier had a second quarter net loss of $1.1 billion, or down $1.69 per share.

Even with the mixed result, the airline is already looking forward to towards a very profitable future. The carrier points to their new alliances with JetBlue in the northeast and Alaska Airlines through Oneworld as key contributing factors for their future growth.

“We continue to develop partnerships that bolster our network and improve the customer journey. There’s no better example of this than our partnerships with Alaska on the West Coast and JetBlue in the Northeast,” Robert Isom, president of American, said in the results call as quoted in a Seeking Alpha transcript. “Those partnerships are already delivering benefits, giving customers more choice and driving revenue in 2 very competitive markets.”

Growing the loyalty program is also a positive indicator for future success. According to Isom, the number of flyers actively transacting in the program is up 50 percent compared to the same time in 2020, with co-brand acquisition growth “climbing back to over 80 percent of 2019 levels.” While the airline is already putting their recovery hopes on AAdvantage, the carrier now wants to make it the “centerpiece” of their new partnerships.

However, airline leadership will need to consider how to manage the loan taken against the program, one of many fundraising tactics the carrier took on survive the pandemic. American chief executive Doug Parker told analysts that loan amortization on the AAdvantage financing begins in 2023, their plan is to put additional cash towards paying it down.

Delta and United Report Optimism for Remainder of 2021

American was the last of the three legacy carriers to report their financial numbers for the quarter. While Delta Air Lines reported mixed results, United Airlines reported a loss despite having a high vaccination rate among their loyalty program members.