July 18, 2013
Miami remains as important as ever to American Airlines as the company prepares to bring its merger with US Airways in for a landing, the parent company’s CEO said Thursday.
In an interview with the Miami Herald, AMR chief executive officer Tom Horton said the airline is keeping its top local brass in place, continuing to add flights from the hub, and hiring more employees in South Florida.
“I would say it is the most important airline franchise in the world, in my opinion,” Horton said of the Miami-based operation that includes Mexico, the Caribbean, and Latin America. “I think that sort of tells you how we feel about it at the new American. It is extremely important to us.”
Horton spoke after AMR released a rosy second-quarter-earnings report. The company reported a $220 million profit, a huge swing from a year ago, when it lost $241 million.
It’s the first time in six years that American has reported a second-quarter profit, due largely to savings achieved through bankruptcy reorganization. Revenue held steady at about $6.45 billion.
AMR Corp. has been operating under bankruptcy protection since November 2011, which allowed it to cut worker pay and other expenses. Spending for wages was 18 percent lower than a year ago and fuel expenses fell 3 percent.
Horton said the company saw its highest-ever passenger revenue for a second quarter.
“We’re seeing the benefit of restructuring savings accelerate on the cost line,” he said. “We’re also seeing results of all of our investments in product, services, new destinations, network alignment, and all of that reflected in the revenue side.”
The parent company said capacity in the third quarter will increase by 2.7 percent compared to a year ago, due in part to new or additional flights into South Korea, Mexico, and Central and South America. The full year increase is expected to be 1.5 percent.
The company said earlier this week that Art Torno, who is vice president for Mexico, the Caribbean, and Latin America, will continue to oversee the region in the merged company. His title will be senior vice president; Marilyn DeVoe will remain in charge of the Miami hub as vice president.
“I just couldn’t say enough good things about Miami, our growth potential there, and certainly our people who make it all possible,” Horton said.
The Miami hub, which has 328 daily departures, is adding more service to Brazil later this year with flights to Curitiba and Porto Alegre. Direct flights between Miami and Milan, Italy, start in late November.
American has added 220 jobs in the past quarter in Miami, including flight attendants and home-based reservations representatives. Overall, according to a company spokeswoman, South Florida saw 155 involuntary job losses as a result of restructuring, which brought the total of employees to a little more than 10,000 by the end of last year. The total now is about 10,140.
The company plans to merge with US Airways and emerge from bankruptcy reorganization in the third quarter of the year. US Airways shareholders approved the agreement earlier this month, and AMR creditors are voting on the plan now. A hearing on the agreement is scheduled for Aug. 15, Horton said, and the final step is regulatory approval.