Economy & Labor

American Airlines suffers revenue loss following pilots union deal

KERA | By Pablo Arauz Peña

Published October 21, 2023 at 12:23 PM CDT

American Airlines airplanes are docked at gates Tuesday, Sept. 12, 2023, at DFW International Airport.

American Airlines took a financial hit of more than half a billion dollars between July and September, the Fort Worth-based company reported Thursday.

The airline said it earned roughly $13.5 billion in the third quarter of the year, about $545 million less than the second quarter. Meanwhile, American's competitors — namely United and Delta — saw revenue gains of 12% and 11%.

The loss comes after the Fort Worth-based airline reacheda deal with the Allied Pilots Union in August. The union ratified the contract, which will give pilots a 21% wage increase and improved benefits.

American CEO Robert Isom tried to ease investors’ fears in a teleconference Thursday morning. He said the deal with pilots is a long-term, four-year commitment.

“As we look ahead to the rest of the year, we continue to prioritize reliability, profitability, accountability and strengthening the balance sheet," Isom said. "We're also focused on taking care of the team.”

Isom assured analysts that the union contract with pilots will improve wages and benefits for pilots and — ultimately — service for customers.

"We have to take that into account as we look to the future and all of us at American have worked tirelessly to set the airline up for success in this short-term yet, you know, long-term world," Isom said.

Chief Financial Officer Devon May said the headwinds are a result of increased salaries and benefits for some employees.

He said the airline is still in the process of negotiating with the Association of Professional Flight Attendants, whichvoted to strike in August.

May said the carrier could see increased revenue if it reaches a deal with the union that matches those of its competitors.

The airline cut its forecast of full-year earnings to between $2.25 and $2.50 per share, down from $3 to $3.75 per share, according toThe Associated Press.

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