Markets

American Airlines plans dividend, stock buyback

/ CBS/AP

FORT WORTH, Texas - American Airlines (AAL) says it will pay its first dividend since 1980.

The company announced Thursday that shareholders will get a quarterly cash dividend of 10 cents per share. American will also spend up to $1 billion to buy back shares, which raises the value of remaining shares.

American Airlines Group Inc. made the announcement as it reported net income of $864 million in the second quarter, up from $220 million a year earlier.

Excluding special charges, the profit was $1.5 billion, a quarterly record for American.

Airlines are prospering as mergers have reduced competition, making it easier to keep prices high. They're also raising billions from extra fees.

American Airlines and US Airways merged last year. The company continues to operate the airlines separately but is planning to integrate them into a single carrier in the future.

Few airlines pay dividends. Southwest Airlines pays one, and Delta Air Lines restored its dividend last year.

First published on July 24, 2014 / 8:25 AM EDT

© 2014 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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