American Airlines February Traffic, Capacity Edge Up; Load Factor Declines

(RTTNews) - American Airlines Group, Inc. (AAL) on Monday reported year-over-year increases in traffic and capacity for the month of February, while load factor declined.

American Airlines emerged from bankruptcy and closed its $11 billion merger with US Airways Group Inc. in early December 2013 to form the world's biggest airline under the name American Airlines Group Inc.

American Airlines' total traffic for the month of February, measured in revenue passenger miles or RPMs, edged up 0.5 percent to 15.08 billion from 15.01 billion in the year-ago period. Total capacity, measured in available seat miles or ASMs, increased 0.8 percent to 19.22 billion from 19.07 billion in the prior-year period.

However, total passenger load factor, or the percentage of seats filled, declined 0.3 points to 78.4 percent from 78.7 percent in the year-ago period. Total enplanements for the month declined 1 percent from last year to 13.96 million.

System cargo ton miles for February grew 11.2 percent from the prior-year period to 173.53 million.

During the first two months of 2014, American Airlines' operations were significantly impacted by severe weather at its hubs in Charlotte, Chicago, Dallas/Fort Worth, New York, Philadelphia and Washington, D.C.

In February, American Airlines canceled more than 14,000 flights, up 149 percent compared to the prior-year period. In the first two months of 2014, the company canceled about 28,000 flights, a 164 percent increase over the same period in 2013.

However, American Airlines believes the weather-related cancellations had a slightly positive impact on unit revenue, but had a larger negative impact on unit cost and first-quarter profitability.

The company expects to disclose an estimate of the one-time profitability impact in early April. Despite these weather-related difficulties, the company noted that unit revenue remained strong.

Looking ahead to the first quarter, American Airlines continues to forecast consolidated passenger revenue per available seat mile or PRASM to increase about 2 percent to 4 percent from the year-ago period.

In a separate statement, American Airlines provided a notice to holders of its Series A convertible preferred stock (AALCP), regarding the third mandatory conversion date.

The company said that a total of 41.96 million shares of convertible preferred stock will be converted into shares of common stock (AAL) as of the open of business on March 10, 2014. By operation of the mandatory conversion mechanism, each holder will have about 70.48 percent of the shares of convertible preferred stock mandatorily converted.

The conversion price used for determining the number of shares of common stock issuable upon conversion of the convertible preferred stock is $33.8080. Each share of convertible preferred stock mandatorily converted will be converted into 0.7510 shares of common stock, subject to rounding.

The company noted that the next mandatory conversion date will occur on April 8, 2014.

In Monday's regular session, AAL is trading at $39.64, up $0.62 or 1.59 percent on a volume of 2.66 million shares.