AMR reports 1Q loss of $1.66 billion
BY D.R. STEWART World Staff Writer
Friday, April 20, 2012
4/20/12 at 4:07 AM
See previous stories about American Airlines and its Tulsa operations.
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AMR Corp., the bankrupt parent of American Airlines, reported Thursday a first-quarter net loss of $1.66 billion, driven by $1.4 billion of bankruptcy restructuring costs and higher fuel bills, compared with 2011's first-quarter loss of $436 million. The net loss per share was $4.95 compared with a loss of $1.31 in 2011's first quarter.
AMR posted revenue of $6.04 billion, a 9.1 percent increase from last year's first quarter revenue of $5.53 billion.
Consolidated passenger revenue per available seat mile - revenue at both American Airlines and American Eagle, its regional airline affiliate - increased 10.3 percent compared with the first quarter of 2011, and mainline passenger unit revenue increased 10 percent.
"The company's revenue performance was driven by significant demand and a positive pricing environment that resulted in higher load factors and better yields," the company said. "Domestic unit revenues increased across all five of the company's hubs" of Dallas-Fort Worth, Chicago, Los Angeles, New York and Miami, Fla., company executives said.
"International performance was improved across all regions, with unit revenue in the Atlantic entity increasing by 9.7 percent in the first quarter 2012 versus the same period last year."
AMR CEO Thomas Horton said American's consolidated revenue per available seat mile increased 10.3 percent in the first quarter compared with the same period of 2011 while the U.S. airline industry average revenue per available seat mile increased 8 percent in the first quarter.
"I am particularly encouraged by our revenue improvement, which outpaced the industry average," Horton said in an email to employees Thursday. "Our network strategy to focus on the key business markets is paying dividends and, notably, we are seeing increasing positive momentum from out Atlantic joint business with British Airways and Iberia.
"Also, our Latin America business is thriving, as we capitalize on our franchise and the economic growth in that region, which we serve better than any other carrier from our gateways in Miami, DFW (Dallas-Fort Worth) and New York."
AMR's major non-operating cost in the first quarter was its $1.4 billion in bankruptcy restructuring expenses - $1.02 billion in aircraft financing renegotiations and rejections, $339 million in expenses related to rejection of facility bond-related obligations and $45 million in fees for bankruptcy lawyers, consultants and advisors, the company said in its 10-Q filing with the Securities and Exchange Commission.
AMR's aircraft-related restructuring expenses include costs related to rejection of 16 aircraft leases, the forfeiture of one aircraft subject to a mortgage and motions in U.S. Bankruptcy Court to modify leases of 158 aircraft, SEC documents show.
"The rejections of the leases of such aircraft and spare engines and the modification of the leases relating to such aircraft have been approved by the bankruptcy court," AMR said in its SEC filing.
American Airlines finished the quarter operating 610 aircraft, down five aircraft from a year earlier.
AMR's restructuring costs included $339 million in expenses associated with its motions (granted by the bankruptcy court) to reject facility agreements supporting special facility revenue bonds at Dallas-Fort Worth International Airport and Fort Worth Alliance Airport, where it operates an aircraft maintenance base it proposes to close.
First-quarter operating expenses were $6.1 billion, a 6.6 percent increase compared with last year's first quarter.
The largest expense was $2.16 billion for fuel, a 17.5 percent increase from the $1.84 billion fuel bill of last year's first quarter.
AMR paid an average $3.24 per gallon for jet fuel in the first quarter, up from $2.76 in 2011's first quarter, which increased its first quarter fuel bill to $324 million more for fuel than it paid in the same period a year ago.
Wages, salaries and benefits in the quarter totaled $1.78 billion, a 3.5 percent increase from 2011's first quarter.
Beginning Monday in U.S. Bankruptcy Court, AMR's lawyers will present the company's restructuring plan that includes labor cost reductions of $1.25 billion a year and layoffs of 13,000 employees, including 2,100 mechanics at American's Maintenance & Engineering Center in Tulsa.
AMR employs 65,000 people.
AMR Corp.’s first quarter
(compared with 2011’s first quarter)
Net loss: $1.66 billion ($436 million)
Net loss per share: $4.95 ($1.31)
Revenue: $6.04 billion ($5.53 billion)
Source: AMR Corp.
Original Print Headline: AMR reports loss
D.R. Stewart 918-581-8451
An American Airlines customer service representative helps a traveler check his bags at LaGuardia Airport in New York. The carrier's parent company reported first-quarter revenue of $6 billion on Thursday, up 9.1 percent from a year earlier. Bloomberg file