US majors had profitable 2011 despite $2 billion AMR loss

By Aaron Karp | February 21, 2012

American Airlines 737-800. Courtesy, AA

American Airlines (AA) parent AMR Corp., which filed for Chapter 11 bankruptcy protection last November, incurred a $2 billion full-year net loss in 2011, according to a US Securities and Exchange Commission filing. But even with that steep deficit, which included $886 million in noncash reorganization charges, US major airlines were in the black in aggregate in 2011 for the second consecutive year.

According to ATW calculations, the seven largest US airline companies earned $295 million in net income in 2011, down 87.6% from a $2.39 billion net profit in 2010. But excluding AMR, the remaining six majors earned a healthy $2.27 billion net profit.

AMR's full-year 2011 revenue rose 8.2% over 2010 to $23.98 billion, outpaced by a 14.5% increase in expenses to $25.03 billion. AA is trying through Chapter 11 to reduce labor costs by $1.25 billion annually (ATW Daily News, Feb. 2). Operating loss was $1.05 billion, reversed from a 2010 operating profit of $308 million.

Overall, the seven major US airline companies' full-year 2011 revenue grew 10.1% compared to 2010 to $134.68 billion. That followed a 14.8% revenue rise in 2010 over 2009. Expenses in 2011 increased by 13% year-over-year to $130.08 billion and operating profit was $4.6 billion, down 35.8% from operating income of $7.17 billion in 2010.

Discuss this news 8

20 Feb23:48

sad to say aa/amr is in a

By Anonymous

sad to say aa/amr is in a hole despite other carriers pulling out..who knows with the cost of fuel going up again what might happen..labor was a major part of their deficient funds, even though the unions will not admit to it..

21 Feb02:04

So they made a nice profit -

By Global Passenger

So they made a nice profit - despite their claiming that high fuel prices would be damaging their bottom line... Increasing their fuel surcharges whenever crude oil prices get up, and keeping their fuel surcharges up whenever crude oil prices get down.

21 Feb15:15

Yes, they made an OK profit

By Tom Maisch

Yes, they made an OK profit but in comparison to many other industries the airlines were very low in margin. Two billion plus spread across 6 very large companies with huge capital costs is hardly worth noticing.

21 Feb15:26

And talk to ANY of their

By reece

And talk to ANY of their Employees and They think they will end up getting Raises. DelusionAAl as usual.

21 Feb16:39

If AMR management did not

By chris

If AMR management did not purchase TWA for BILLIONS, we would not have half a BILLION or more in interest payments due each year. It is really their fault we are in this position. It took 10 years to finally realize they could not cover up their mistake any longer. Plus, they sold off the fuel hedges in 2003 for managements pensions and we incurred BILLIONS in debt for fuel charges all under CARTY. DUMB BUTT!

21 Feb17:14

Southwest Airlines and

By chris

Southwest Airlines and American Airlines would be the best merger combination for several reasons. 1st SWA needs an International division because SWA has basically dominated the domestic market. 2nd. SWA could move the international flying to their mini hubs and if the Airport Authority increases their price, SWA could move the Division to a different Mini Hub with a lower operating cost. This will prevent Airport hubs from increasing expenses with the entrench HUB and SPOKE airlines.
AA pays $354,000/gate at JFK in 2005 times 40 gates is almost $15 million in rent/year. Then, JFK Port Authority brings in JetBlue to compete directly with AA. Now, if you owned a commercial property with Sears and JC Penny as your anchor tenant, would you bring in Walmart to compete directly with your BEST tenants? I don't think so!!
I heard that San Juan Airpot increased AA's landing fee from $600 to $3600 times 50 flights/day to add $150,000/day of expenses to the bottom line. The kicker was San Juan brought in other airlines to compete directly with AA and did not charge any landing fee. Ridiculous!!

21 Feb17:17

So Mr. Anonymous, let's just

By Jack Ross

So Mr. Anonymous, let's just keep slamming the Union folks who have worked extremely hard at their jobs. Are you ashamed of your stance, is that why you won't put your name here? The workers are not the problem!

21 Feb18:49

Come on Global Passenger, the

By AirlineCowboy

Come on Global Passenger, the Average margin of a Major Airline is 1.5 to 4%. and to prove it, Southwest posted a profit for the year of under 100M (the Master of Fuel Hedging). The President wants to triple your security taxes, his policies are driving up fuel cost to record highs, and the average major airline spent more than 3 Billion extra on fuel last year. Southwest has led the way in raising prices, go figure, fuel is high for a Jet and high for your car.