American Airlines Just Released a Positive Earnings Report And I’m Still Not Excited About Its Future
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INSIDER SECRET: The cheapest way to get American Airlines Admirals Club lounge access is by opening the Citi® / AAdvantage® Executive World Elite™ Mastercard® because it comes with a lounge membership and its annual fee is $200 less than the comparable membership fee.American Airlines released its second quarter earnings report and even though it has been hit hard by the continued grounding of the Boeing 737 MAX it did report slightly higher than expected profits.
American Airlines was operating 24 737 MAX aircraft at the time of its grounding (with more on order), second only to Southwest. This is a big reason behind a large number of flight cancellations this past quarter, but it’s not the only reason. American Airlines has been in the middle of an ugly feud with its mechanics’ union, even accusing them of causing 1,500 flight delays and filing a lawsuit against them. To me, that is more important for the average passenger than anything else touched on in the earning report.
There is one line in the report, in reference to higher year-over-year operating costs, that stood out to me (emphasis mine):
driven primarily by lower than planned capacity due to the Boeing 737 MAX grounding and operational disruptions related to an illegal work slowdown by our mechanics’ union in an effort to influence contract talks.
So yeah, things aren’t all roses between management and the mechanics’ union. This only adds to (or highlights) American Airlines’ traditionally poor performance in terms of cancellations and delays and I don’t expect things to improve in the near future.
All things considered, I do tend to fly American Airlines for most of my domestic travel and between the AA reduced mileage awards and economy web specials I’ve been able to pick-up some good deals with my American Airlines miles. However, it can be incredibly tough to find international ‘premium cabin’ award seats with American Airlines. I have found American Airlines miles to be very valuable for booking partner award flights. This year I’ve booked award flights with Qatar Airways and Etihad, which are two of the best ways to use AA miles.
But American’s partnership with these carriers doesn’t look like it will continue forever, so it’s better to not earn AA miles if you’re planning on booking Etihad awards with them too far into the future. Also, American Airlines will be following in the footsteps of Delta and United Airlines with plans to move away from the current AA award chart to dynamic award pricing. This is a double-edged sword: I’ve found some exceptional deals as a result of Delta’s dynamic pricing, but business-class seats can get outrageously priced.
American Airlines has been investing in its Admirals Club airport lounge network and opened its Flagship Lounge and Flagship First Dining in Dallas this quarter and there are also new lounges planned for San Francisco, New York – LaGuardia and Philadelphia.
American Airlines Admirals Club membership costs up to $650 for a new individual membership, but you can save $200 by getting the Citi / AAdvantage Executive World Elite Mastercard®, which comes with an Admirals Club membership. The Citi American Airlines Executive card only has a $450 annual fee, plus you can add up to 10 authorized users to your account for free and each authorized user will get lounge access as well. To learn more, read our full Citi AAdvantage Executive review.
If you’re hesitant to shell out that much on a credit card’s annual fee, you could earn American Airlines miles with no annual fee if you open the American Airlines AAdvantage MileUp℠ Card or you could earn much bigger bonuses with only a $99 annual fee with the:
- CitiBusiness® / AAdvantage® Platinum Select® World Mastercard®
- Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard®
To learn more about American Airlines miles, check out these guides:
- Do American Airlines miles expire?
- How to setup an American Airlines account
- American Airlines status
- How to use American Airlines miles
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