American announces record Q3 earnings

American Airlines (AAL) reported adjusted third-quarter earnings Thursday of $1.2 billion and announced a $113 million stock buyback.

Earnings per share were $1.28.

"We anticipate we will also post a record profit for both the fourth quarter and full year 2014," said Doug Parker, CEO of the airline that merged with US Airways last December.

The Fort Worth-based airline had a record $11.1 billion in revenues for the July-September quarter, up 4.4% from the same period last year.

Parker said some of the biggest tasks of the merger remain ahead but that the airline is in an excellent position for 2015.

American's stock was up nearly 7% by 2:30 p.m. Thursday, up $2.56 to $39.60.

So far in the merger, the airline:

• Rebranded nine Admirals Club lounges at eight airports, including Washington's Reagan National, Boston, Pittsburgh and Tampa.

• Reached a tentative agreement with the Association of Professional Flight Attendants, which is pending ratification by 24,000 workers.

• Restructured the Miami hub to increase connections.

• Combined operations at 82 airports, including the hub at Chicago O'Hare.

• Broke ground on an integrated operations center in Fort Worth, which is scheduled to be completed within a year.

Challenges that remain in the merger include combining the frequent-flier programs and the reservations systems. The results of the flight-attendant voting are expected Nov. 9 or 10, and labor talks will resume with pilots Nov. 10 or 11.

Beverly Goulet, the chief integration officer, said the frequent-flier programs are expected to merge in the second quarter of 2015 and the reservation systems late in 2015, with no firm dates for either.

"The last thing we want to do is push forward and not do it right," Parker said. "If we're not ready, we won't go."

A restriction on long-distance flights from Love Field in Dallas expired in mid-October, and the competition from Southwest Airlines was expected to challenge American based in Dallas/Fort Worth.

President Scott Kirby said he couldn't discuss details but that American's frequent-flier program, its first-class seating and frequency of flights will help it compete and win. From the end of the restriction Oct. 13 through the end of the month, passenger revenue on flights with non-stop competition from Love Field were up 3%, Kirby said.

"Even though it's early, we're off to a good start in that competition," Kirby said.

Asked about trans-Atlantic flights, Kirby said flights from Charlotte fell below expectations.

"If it's profitable we'll continue it," Kirby said in reviewing the schedule for next summer. "We don't have any specifics to announce today."

Parker said adding a flight to Frankfurt, Germany, from Miami wouldn't affect flights from Charlotte.

Asked about how the Ebola outbreak in West Africa is affecting flights, Kirby said there was a dropoff in sales the day after a recent congressional hearing, but nothing measurable after that.

"Bookings have snapped back to normal," Kirby said. "I hope there are no more cases."