American Airlines projects USD5 billion fuel cost savings in 2015, but flight crew costs to blow out

Despite heightened low cost competition in numerous markets that began in 4Q2014, American Airline recorded strong financial results and has opted to initiate a USD2 billion share repurchase set for completion in 2016, after finishing an initial USD1 billion buyback a year early.

Like its US airline rivals, American is projecting a soft unit revenue performance in 1Q2015 driven by the growing pressure from low cost airlines, higher aircraft density and some currency headwinds from the strengthening USD.

American's projected decline is somewhat steeper than its rivals, but some of the pressure it experienced in certain geographies in 2014 should ease in 2H2015. At the same time the airline is projected to save a whopping USD5 billion in fuel expense during 2015, a benefit of its decision not to adopt a fuel hedging strategy.