Photo: Flickr Matt Hintsa
DALLAS (AP) — American Airlines is reaping higher fares and record revenue but still losing money.AMR Corp. said Wednesday that it narrowed its second-quarter loss to $241 million mostly because of $230 million in costs tied to its bankruptcy restructuring. A year ago, it lost $286 million.
There are glimmers of hope for a turnaround at American.
Without restructuring costs and other special items, AMR would have earned $95 million, its first operating profit for the early-summer quarter since 2007. Revenue climbed 5.5 per cent to $6.46 billion, a record for any quarter. And between American and regional affiliate American Eagle, planes averaged 85.1 per cent full at the start of summer, also a company record.
CEO Thomas Horton called the second-quarter “a time of exceptional improvement.”
American and AMR filed for bankruptcy protection in November. The company is seeking to cut labour costs and shed money-losing routes to return to profitability while fending off unsolicited takeover advances from smaller rival US Airways Group Inc.
To control its own fate, AMR will have to prove to its bankruptcy creditors that it can do better on its own than it could if paired with US Airways.
“This improvement reflects only a fraction of our ongoing restructuring progress,” Horton said. “While there is still much to be done, we expect this momentum to build quickly as the new American re-emerges as an industry leader.”
Like other airlines, American caught a break when jet fuel prices began falling in April. AMR’s fuel spending increased just 0.3 per cent compared with a year earlier, a welcome break from the double-digit gains of recent quarters.
That helped AMR limit its increase in operating costs to 1.9 per cent, well below the gain in revenue.
AMR shares were removed from the New York Stock Exchange after the bankruptcy filing. They continue to trade over the counter but have fallen below $1 because companies in bankruptcy usually issue new stock after they go through the process.