In a recurring theme of celebrating what didn’t happen, American Airlines CEO Tom Horton has celebrated that, once again, American Airlines has not made a profit.

This time in April.

So, what are they celebrating?  A fairly mild closure of the gap of losses year over year.  April 2012’s loss was $142 million ($67 million if reorg costs weren’t counted, but we do count them.)  This year, it’s down to $105 million ($39 million if you exclude reorganization charges and I don’t.)

Why do I count reorg charges?  Because in the airline world, something always happens.  In each financial reporting, an airline will mention that it had “one time” expenses.  The problem is that these one time expenses always happen, they are just different each time.

So, is this improvement?  Sure but we knew that was coming.  Remember the last 18 months?  AA has been massively reducing costs?  This is the natural outcome of reducing those costs.

The real nugget is in the revenue picture and I’ll point out that AA mentions that it’s revenues are down by $48 million compared to last year.  That is a problem.  And it’s a problem that many have pointed out over and over again.

No airline gets “fixed” by merely reducing costs and that is especially  true of American Airlines.

The time to celebrate is when costs are down, the fleet is renewed and revenues are up.

When will that happen?  I’d say about 2 to 3 years after Doug Parker and his team have taken over completely.

Filed under: Airline News, Mergers and Bankruptcy by ajax