American Airlines reported on Monday that 80% of its revenue this year will originate from loyalty program members and passengers in premium cabins such as business class, a notable increase from 70% recorded in 2017.
The airline, alongside other industry players, has invested substantial sums into upgrading cabins, lounges, and onboard amenities to better cater to high-spending travelers. This emphasis on premium offerings reflects a broader trend within the industry, with American’s competitor Delta Air Lines consistently highlighting the growing importance and rapid expansion of premium revenue compared to ticket sales in the economy class.
Earlier in the day, American announced plans to acquire 260 new aircraft from Boeing, Airbus, and Embraer as part of its fleet modernization efforts. Additionally, the airline intends to retrofit older Airbus planes to expand the capacity of their first-class cabins.
American’s revenue outlook was shared during its first investor day in over six years. The Fort Worth, Texas-based carrier expressed optimism about growing pretax margins in the upcoming years while simultaneously working to reduce its debt burden.
Despite these positive projections, Americans refrained from offering specific profit or revenue forecasts for the first quarter or the full year. Analysts surveyed by LSEG, formerly known as Refinitiv, anticipate earnings per share of $2.56 and revenue totaling $54.97 billion for the year 2024.
Following the announcement, American Airlines shares experienced a nearly 4% decline in midday trading.
