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American Airilnes parent loses $1.45 billion in quarter
The parent of American Airlines swung to a big loss in the second quarter as high fuel prices swamped an increase in revenue and led the nation’s largest carrier to write down the value of its jets, according to wire reports Wednesday.
Still, the results reported Wednesday were not as bad as Wall Street had feared.
AMR Corp. said that for the three months ending June 30, it lost $1.45 billion, or $5.77 per share, compared to a profit of $317 million, or $1.08 per share, a year ago.
American is the parent company of American Eagle, which provides service to East Texas Regional Airport and Tyler Pounds Field. American Eagle earlier announced curtailment of East Texas flights beginning in September.
When flights to and from East Texas Regional are reduced from three daily to two on Sept. 3, American Eagle is scheduled to begin jet service with 50-seat Embraer EMB-145 regional jets. Local arrivals are due at 10:25 a.m. and 4:25 p.m. with local departures scheduled at 10:50 a.m. and 4:50 p.m., officials said.
Excluding special charges to write down the value of its fleet, AMR said it would have lost $284 million, or $1.13 per share.
Analysts, who typically exclude charges from their forecasts, expected AMR to lose $1.40 per share, according to a survey by Thomson Financial.
Revenue rose 5.1 percent, to $6.18 billion. Analysts expected $6.14 billion.
Fuel costs spiked 47.4 percent, to $2.42 billion — an increase of about $780 million from a year ago.
A gallon of jet fuel went from $2.09 a year ago to $3.19, and would have been even higher if the company hadn’t bought some of its fuel in advance at lower prices. AMR expects to pay $3.81 per gallon in the third quarter.
Chairman and CEO Gerard Arpey called the second-quarter results disappointing, but he said the Fort Worth-based company was taking steps to manage through a tough stretch.
AMR, which also owns the American Eagle airline, is cutting about 6,800 jobs and reducing its U.S. flying sharply to bring down costs while raising fares and special fees to boost revenue. Analysts, however, expect the company to keep losing money at least through 2010.
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