CHICAGO -(Dow Jones)- Facing a hefty financial loss in 2008 and the loss of its spot as the world's biggest airline by passenger traffic, AMR Corp's (AMR) American Airlines is initiating long-range plans aimed at shoring up financial stability and keeping a competitive edge.
The soaring cost of jet fuel, up more than 80% from last year, is expected to end a two-year string of annual profits for American and for the U.S. airline industry.
Analyst Ray Neidl at Calyon Securities on Thursday forecast a wider loss for American than earlier projected, as the price of jet fuel continues its relentless rise. He expects AMR to lose $7.75 per share in 2008, more than his earlier forecast for a loss of $7.02 per share.
Nearly all airlines have said they will cut seat capacity this fall, weeding out flights that don't make money. Airlines, including American, have already announced some of the schedule changes which will be in place by the fourth quarter of the year.
In a memo to employees Wednesday, American said cutbacks would reduce its workforce by year's end by 7,000 employees, or about 8%. That matches the 8% capacity reduction the airline announced in May.
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A WallStreet Journal On Line Story
The soaring cost of jet fuel, up more than 80% from last year, is expected to end a two-year string of annual profits for American and for the U.S. airline industry.
Analyst Ray Neidl at Calyon Securities on Thursday forecast a wider loss for American than earlier projected, as the price of jet fuel continues its relentless rise. He expects AMR to lose $7.75 per share in 2008, more than his earlier forecast for a loss of $7.02 per share.
Nearly all airlines have said they will cut seat capacity this fall, weeding out flights that don't make money. Airlines, including American, have already announced some of the schedule changes which will be in place by the fourth quarter of the year.
In a memo to employees Wednesday, American said cutbacks would reduce its workforce by year's end by 7,000 employees, or about 8%. That matches the 8% capacity reduction the airline announced in May.
LINK to Full Story
A WallStreet Journal On Line Story