Earnings for American and Southwest Airlines Soar | KERA News

Earnings for American and Southwest Airlines Soar

Jul 24, 2014

American Airlines announced its most profitable quarter ever today, and its first dividend since 1980. Southwest also had a record quarter, and announced a companywide bonus. It’s a good time to be an airline based in North Texas.

American, the world’s largest airline, and Southwest, which carries more domestic passengers than any other, blew their old earnings records away. American more than doubled last year’s 2nd quarter earnings, Southwest nearly doubled last year’s number.

“These guys have got to be dancing in the streets,” Parsons says, “they’re all saying we want to buy back our stock, we want to give our employees bonuses.”

Tom Parsons, with BestFares.com, says every U.S. airline did well.

“It’s just an amazing number in just one quarter,” continues Parsons. “They can make - between all of them - close to $4 billion in profits.” 

Doug Parker, American’s CEO who ran USAirways before the two merged, called it a great day for American, with both profits and, for the first time in three decades, dividends.

Southwest Airlines's ubiquitous Boeing 737
Credit Southwest Airlines

“It’s sometimes hard to remember,” Parker says, “that less than just 8 months ago American was in bankruptcy and getting ready to emerge from bankruptcy through a  merger with U.S. Airways. Yet today here we are reporting record profits, prepaying debt, making additional pension contributions.”

Just a few miles from Fort Worth-based American, Southwest Airlines in Dallas  had such a good bottom line it gave every worker a one-time bonus of $200. Southwest’s Pilot’s Association President, Mark Richardson, though, throttled back his enthusiasm. His members and several groups are now in contract negotiations.

“It’s nice to think the company is thinking about us,” Richardsons says.  “Speaking for my union, we would rather see the money invested in closing contracts.”

Workers with Southwest and American also say record profits mean passengers are satisfied with the airlines. Now, they have to keep delivering. Tom Parsons expects they will.  

“Since they made profit,” Parsons says, “they won’t want to give up that profit when they go into the slow travel season like the end of August 25th through the fall. And we’ll see prices of airfares drop.”

Especially, he says with the end of the Wright Amendment in October. Restrictions on flights in and out of Dallas Love Field will finally be lifted. He says deals will fly from Southwest, at Love, and American, at DFW.