June 22, 2024

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Loyalty, premium will make up 80% of revenue

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A Boeing 737 passenger aircraft of American Airlines arrives from Austin at JFK International Airport in New York as the Manhattan skyline looms in the background on February 7, 2024.

Charly Triballeau | Afp | Getty Images

American Airlines said Monday that 80% of its revenue this year will come from loyalty program members and passengers in premium cabins like business class, up from 70% in 2017.

American and other carriers have poured billions of dollars into new cabins, lounges and onboard upgrades to cater to high-spending travelers. American’s rival Delta Air Lines has repeatedly said that premium revenue growth has become a bigger share of its overall sales and is growing faster than ticket sales in the coach cabin.

American earlier on Monday said it was ordering 260 new Boeing, Airbus and Embraer planes to revamp its fleet and that it would retrofit older Airbus planes to increase the size of their first-class cabins.

American’s revenue forecast is part of its first investor day in more than six years. The Fort Worth, Texas-based airline said it expects to grow pretax margins in the coming years and chip away at its debt load.

The carrier declined to provide profit or revenue forecasts for the first quarter or full year. Analysts polled by LSEG, formerly known as Refinitiv are projecting 2024 earnings per share of $2.56 and revenue of $54.97 billion.

American shares fell nearly 4% in midday trading.

2024-03-04 12:41:00

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