UPDATE: AMR Reports 2Q Loss, Lines Up Aircraft Financing
16 July 2009 - 1:18AM
Dow Jones News
American Airlines' parent AMR Corp.(AMR) beat expectations with
a second-quarter loss of $390 million Wednesday, as the industry
wrestles with rising costs and falling revenue.
Shares were recently trading at $4.27, up 9 cents or 2.15%. AMR
shares are up 6.2% for the month but are down nearly 60%
year-to-date.
The second-largest U.S. carrier by revenue kicked off the
airline sector's reporting season - expected to be dominated by
efforts to boost cash and liquidity during the peak travel season -
against a backdrop of rising fuel expenses.
AMR has been among the most successful at raising funds and said
it has facilities in place for aircraft deliveries through 2011,
though its cash position is weaker than a year ago.
With oil prices rising, airlines also face higher costs, after
cutting capacity in the wake of continued weakness in passenger
revenue. American's revenue per available seat mile fell 16% in the
quarter to June 30.
Its quarterly loss narrowed from a year ago, reflecting lower
fuel prices and cost cuts. The $1.39-per-share deficit compared
with $1.46 billion, or $5.83 per share a year ago. Excluding
one-time charges, mainly related to falling aircraft values, the
loss narrowed to $1.14 per share from $1.19 per share last
year.
AMR said it ended the quarter with $3.3 billion in cash and
short-term investments, down from $5.5 billion a year ago.
The U.S. airline industry has reduced seat capacity to match
falling demand from both business and leisure passengers. While
that has kept planes full, with fewer tickets being sold, and
constant fare sales, carriers are expected to record a second year
of losses in what is traditionally the strongest travel season.
Across the board, airlines are raising cash to prepare for fall,
the weakest part of the travel year. AMR said last month it would
cut seat capacity by 7.5% this year.
The company said it has completed financing for the 84 aircraft
due to arrive through 2011, the largest delivery schedule in the
U.S. industry.
-By Ann Keeton, Dow Jones Newswires;
312-750-4120;ann.keeton@dowjones.com