LONDON – British Airways faces the same issues that have hurt big U.S. carriers: brutal, low-fare competition from all sides, labor unrest from a unionized, well-paid workforce and high overall costs.

But Britain's flag carrier earned nearly $1.3 billion in operational profits over its last two fiscal years, among the world's very best performers.

During its last two full fiscal years, American Airlines Inc. – British Airways' alliance partner and the world's largest airline – lost about $4.2 billion on an operating basis and nearly filed for bankruptcy protection.

What gives?

The simple answer appears to be British Airways' reliance on high-dollar international flying from London for the bulk of its profits.

American has enjoyed its success in flying a 757 from Boston to Manchester, England, by selling the whole plane as coach seats, though the aircraft keeps a first-class cabin.

More routes are likely next year using the 757s from the Northeast to the United Kingdom, he said.

While British Airways' first-class and business-class service are widely perceived to be superior, American offers a better global network and a more vibrant frequent flier program, he said.

A new lie-flat business-class seat is coming for American to let it catch up to some of the European airlines, "but we're having pretty good success selling our business class without the new chair," he said.