Tuesday, July 29, 2014
Inquirer Daily News

American Airlines CEO is optimistic

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U.S. Airways CEO Doug Parker said the merging airline would not need two centers. (Michael S. Wirtz / Staff Photographer)
U.S. Airways CEO Doug Parker said the merging airline would not need two centers. (Michael S. Wirtz / Staff Photographer)

American Airlines Group Inc. sees good worldwide travel demand and no "material pockets of weakness," a brighter outlook than at European carriers that have cut earnings forecasts.

"Demand globally is strong," Chief Executive Officer Doug Parker said Tuesday as American broke ground on an operations center near its headquarters in Fort Worth, Texas. While some airlines have added seating on trans-Atlantic routes, "capacity has been increasing in response to demand," he said, not being piled on recklessly to chase market share.

American Airlines and USAirways completed their merger last year. Philadelphia had been a USAirways hub and remains one in the merged airline.

Parker's views contrasted with those of Air France-KLM Group and Deutsche Lufthansa AG, which have both pared profit projections as excess capacity on long-range routes erodes fares.

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  • Air France-KLM reduced its full-year forecast Tuesday for earnings before interest, tax, depreciation and amortization, singling out overcapacity on North American and Asian routes, poor demand for freight and the fallout from a dispute with Venezuela over currency controls.

    Lufthansa lowered its profit projection last month, blaming a surge in capacity among Persian Gulf airlines, a group that includes Emirates.

    American, the world's largest carrier, faces less direct competition with Gulf rivals than do Air France-KLM and Lufthansa, the biggest European airlines. The U.S. industry has returned to profit with tighter curbs on available seating, boosting management's leverage in raising ticket prices.

    Mary Schlangenstein Bloomberg News
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