By DAVID KOENIG
AP Airlines Writer
FORT WORTH, Texas (AP) _ Dramatically cheaper jet fuel helped American Airlines nearly double its second-quarter profit to $1.7 billion despite lower revenue.
The world’s biggest airline said Friday that it was American’s most profitable quarter ever, after excluding one-time costs and gains.
Friday’s results from American capped an astonishing earnings season for the nation’s biggest airlines, several of which reported record profits in the April-through-June period.
Still, American warned that a key revenue figure will decline in the third quarter, and the stock fell 7 percent.
Investors worry that cheaper fuel is tempting the airlines to grow too fast, leading to lower prices after five straight years in which airfares rose faster than inflation. American doesn’t disclose average fares, but a key figure shows that passengers paid less per mile in the second quarter than they did last summer, and a top American executive said that trend could continue into the second half of next year.
American’s message to investors Friday was, don’t be fixated on revenue per seat.
“Our largest cost has fallen 50 percent” since last summer, said CEO Doug Parker. “The revenues haven’t fallen nearly as much as the costs have fallen, and as a result earnings are growing.”
American’s fuel bill dropped by more than $1 billion _ a 37 percent savings _ compared with the same quarter last year.
That helped American Airlines Group Inc. report net income of $2.41 per share. Adjusted profit, which excludes one-time costs, was $2.62 per share, topping the $2.58-per-share forecast from nine analysts surveyed by Zacks Investment Research.
Revenue fell 5 percent to $10.83 billion, a sharper drop than Wall Street expected. Seven analysts surveyed by Zacks had forecast $10.93 billion.
The company, which owns US Airways and several regional airlines, reported that passengers paid 6.1 percent less per mile than they did in the second quarter of 2014.
American said that revenue for each seat flown one mile will drop by between 6 and 8 percent in the third quarter. That’s a closely watched figure in the airline business, and airline President Scott Kirby said it’s reasonable to expect it to decline until the second half of 2016. United, Delta and Southwest have also predicted the figure will drop in the July-through-September quarter compared with 2014.
Also Friday, American announced that it doubled its share-buyback plan and could purchase up to $4 billion of its own stock. Buybacks are designed to boost the value of remaining shares. The company also said it will pay a dividend of 10 cents per share next month.
Shares of the Fort Worth-based company fell $2.98, or 7 percent, to close at $39.63. They began the day down 21 percent in 2015 after more than doubling in 2014.
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