It was a bold statement, even for an investor day.
“I don’t think we’re ever going to lose money again,” American Airlines CEO Doug Parker said Thursday.
Airlines have reaped the benefits of a plunge in oil prices in mid-2014, raking in record profits. It’s been a sharp turnaround for an industry that has suffered bankruptcies and recessions over the last decade.
That’s not to say there aren’t pressures. The largest U.S. carrier earlier this month lowered its revenue outlook for the third quarter following massive hurricanes.
“The old world was darkness, but now it’s light,” he said. “I know I sound like an evangelist talking about this.”
But behind the outlook is the airline’s confidence that it can wring more from passengers.
Ancillary revenues, which include items like passenger baggage fees, have been a bright spot for airlines, including American. Robert Isom, president of American Airlines, said the airline is “just scratching the surface” in ancillary revenues.
The introduction of more cabin classes, such as basic economy and premium economy, are another recipe. Isom said that since the no-frills basic economy was introduced, half of passengers are “buying up from that offering” and noted that the new class of highly restricted service is “not a price cut.”
The airline is also upgrading its fleet to pack more seats on board, Isom said.
Shareholders appeared to believe the CEO’s sunny outlook. Shares were recently trading up 2.5 percent.