American Airlines Inc. (NASDAQ: AAL) just announced that it had revenue of $41 billion and net income of $7.6 billion last year. The carrier said both were records. To hit the figure, American had to fly 202 million passengers last year, the equivalent of about a third of the U.S. population. How did it reach such a high number?
First, American flies across and to four continents. Domestic travel accounts for about 60% of American’s traffic, followed by Latin American, Atlantic and Pacific routes, in that order of traffic. This adds up to flights to 50 countries. To hit this number, American flights total 6,500 a day to 350 airports.
American could not approach its current level of success if not for the merger between U.S. Airways and American when the latter came out of Chapter 11. The resulting company earned the top spot on this year’s Fortune’s turnarounds list:
Headquartered in Fort Worth, American Airlines Group is the product of American Airlines’ December 2013 merger with US Airways. Despite its new name, it still had old problems to deal with, specifically a loss of $1.8 billion that put the airline on Fortune‘s 2014 list of companies that lost the most.
Despite steep odds, the company turned the ship around, and did so to the tune of $4.7 billion. This represents the largest change in profits of any company on this list, which the company’s 2014 annual report attributed in part to a net profit of $1.1 billion that it made just in its fourth quarter.
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American’s marriage came just after consolidation of United’s buyout of Continental in 2010, which created United Continental Holdings Inc. (NYSE: UAL), and Delta’s buyout of Northwest. which created Delta Air Lines Inc. (NYSE: DAL). What was once a six major carrier industry in the United States quickly became three.
How did America get to the point where it flies 200 million people a year? It made its way via Chapter 11 and a merger.
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