AMR loses $11 million in second quarter, orders additional 35 737-800s

Photo: Courtesy, American Airlines

American Airlines’ parent AMR Corp. posted a second-quarter net loss of $11 million, narrowed from a $390 million deficit in the year-ago quarter, and announced yesterday that it has exercised options for 35 additional 737-800s.

The company also promoted Executive VP-Finance and CFO Tom Horton to the post of president, reporting directly to Chairman and CEO Gerard Arpey. Horton and Arpey said they were pleased with the quarter's "considerable progress" compared to both the year-ago period and the first quarter, in which it lost $505 million (ATW Daily News, April 22), but acknowledged that failing to return to the black was inadequate. "Losing money is not acceptable," Horton told analysts and reporters. "But we believe the improvement we're seeing indicates we're heading in the right direction."

The company said the 35 737-800s ordered are in addition to an order for 84 of the type that began arriving in 2009. It expects to have 195 -800s in its fleet by the end of 2012. The aircraft are replacements for MD-80s. "These are of course replacement aircraft," Arpey said, emphasizing that the carrier will still be in position to "reduce capacity" if necessary. "I think certainly our bias after the past 10 years with the industry losing over $50 billion…should be cautious as it relates to capacity," he said.

Second-quarter revenue grew 16% to $5.67 billion while expenses rose 7.1% to $5.48 billion, producing an operating profit of $196 million, reversed from a $226 million operating loss in the prior-year period and its first quarterly operating profit since in the 2007 third quarter. Mainline traffic lifted 2.1% to 32.22 billion RPMs on a 0.4% lowering of capacity to 38.41 billion ASMs, producing a load factor of 83.9%, up 2 points. Passenger yield upped 14% to 13.28 cents as PRASM jumped 16.8% to 11.14 cents and CASM climbed 7.3% to 12.62 cents. CASM ex-fuel rose 3.5% to 8.75 cents.

With Horton becoming president, Senior VP-Customer Relationship Marketing Bella Goren ascended to the role of CFO, reporting directly to Horton.