American Airlines Group - Second quarter earnings overview (Part 3 of 11)
Operational performance in 2Q14
Airline passengers rate an airline based on various operational factors that influence the quality of their travel. U.S. airline companies track their performance on a monthly basis using some indicators of customer satisfaction published by the U.S. Department of Transportation (DOT). According to the management 2Q14 operational performance was negatively impacted by the severe weather conditions in May and June leading to flight cancellations in the Chicago and Dallas/Fort Worth hubs.
- American Airlines’ has improved its operational performance during the quarter with respect to on-time performance and completion factor. On-time performance, the percentage of flights arriving as per the scheduled time, increased by 6.6 points, 0.4 points and 0.9 points in April, May and June, respectively. Completion factor which is the percentage of scheduled flight operations completed improved in April and June.With respect to on-time performance in April, the company distributed $5.5 million as incentive payouts to employees. According to the management, the employees have earned a total of $16.5 million in incentive payouts till date.
- However its performance related to baggage handling and number of customer complaints has declined with a significant increase in the rate of mishandled baggage per 1,000 passengers and rate of customer complaints filed with DOT per 1,00,000 enplanements during the quarter. During the first half of 2014 American had 3.8 mishandled baggage reports per 1,000 passengers while its competitors Delta (DAL) and JetBlue (JBLU) had 2.57 and 2.07, respectively. American has however fared better than United (UAL) and Southwest (LUV) with 3.87 and 4.51 reports, respectively
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