AMR loses $390M in 2Q

[FA Mikey]

AMR Corp., parent of American Airlines Inc., said Wednesday it lost $390 million in the second quarter as lower demand, fare sales, higher fuel costs and swine flu hurt its results.

The company estimated that concerns about the H1N1 virus, or swine flu, reduced its revenues by $50 million to $80 million in the quarter.

The quarterly results compare to a $1.45 billion loss in second quarter 2008 when huge write-offs, particularly on airplane values, ballooned the deficit.

Excluding special items, AMR lost $319 million in the most recent quarter, compared to $298 million in second quarter 2008.

AMR and other air carriers typically make money in the second quarter as more travelers head out on vacation and fill its airplanes. However, the world’s economic slump had reduced the number of customers, particularly the higher-paying business travelers who buy full-fare and premium tickets.

full article here

 

[MCI transplant]

<_< ----- And the downward spiral continues! :unsure:

 

[WingNaPrayer]

I predict additional RIFs of 10-12K by summer's end.

 

[eolesen]

I predict the sun will rise tomorrow morning.

AA's loss echoes what very few of us have been saying --- there's no shortage of seats being filled, but the premium and unrestricted fares are way down from where they were previously.

Some of that is companies that have gone out of business (AA had a huge reliance on investment bank contracts prior to the Wall Street meltdowns last year, and YOY comparisons won't reflect that until 4Q09).

Another part of that is "premium class guilt syndrome" thanks in large part to the same people who raised hell over GM's private jet fleet (never mind the fact that their main business purpose was to fly the auto plant equivilent of AOG parts and teams to their plants). Rather than face questions over executive excess/greed, many companies are revising their travel policies to require everyone to fly in discounted coach, regardless of job title.

Enjoy the next few days of being able to keep your heads in the sand and pretend it is AA cooking the second set of books.

When you see the same results coming from the other union and non-union carriers, perhaps the message will set in.

 

[FWAAA]

Enjoy the next few days of being able to keep your heads in the sand and pretend it is AA cooking the second set of books.

When you see the same results coming from the other union and non-union carriers, perhaps the message will set in.

The non-believers will simply repeat what they've posted for the past 6+ years now: all legacy airlines are in on it together in a massiver union-busting conspiracy that began with a massive terrorist attack almost eight years ago that decimated legacy airline revenue and has continued unabated thru the current economic disaster. The President keeps telling us that it's the worst recession since the Great Depression.

AMR's results did beat the analysts' expectations.

 

[TIME FOR CHANGE]

Piss poor management had nothing to do with it

:huh:

 

[TWU informer]

Reduce the number of seats in the industry until the seat commands a profit.

I can keep giving of my paycheck and my benefits, but I don't control the number of seats nor do I control the revenue collected to fly the damn seat. Employees give, and fare war just reduces to a smaller premium amount.

Concessions are never going to put this industry or this company in the black.

Simply put, until the supply is lower than the demand to the level the seat commands a profit this will continue.

I don't have my head burried in the sand, the folks managing this indsutry do. If the folks with the business degrees cannot understand a simple concept of supply versus demand then the only thing that will save the industry is government regulation that makes it against the law to sell a seat for less than it cost to produce. What these revenue managers are doing should be criminal with prison term punishment.

 

[twaokc]

What these revenue managers are doing should be criminal with prison term punishment.
[/quote]


What Compton and Carty should have gotten back in 2001.

 

[Bear96]

Reduce the number of seats in the industry until the seat commands a profit.

OK, done.

(BTW, you are now out of a job because the industry has shrunk so much.)

 

[TIME FOR CHANGE]

Maybe
But at least the guys left will be able to make ends meet.

And eventually I can get back into a job that pays well enough to want to go back.

So shrink away my boy

 

[TWU informer]

OK, done.

(BTW, you are now out of a job because the industry has shrunk so much.)

And your solution?

 

[Bob Owens]

Last year they lost nearly $1.5 billion , this year nearly $400 million, thats a $1.1 billion dollar improvement!!!

 

[Bear96]

And your solution?

Two components:

1. I agree with let the let-the-industry-shrink idea. I just find it amusing that many airline workers adopt that same philospophy when (a) it means many of them would be out of jobs, and (b) I see the militant "no airline has ever shrunk to profitability!" mantra frequently when there is the slightest reduction in unprofitable routes or services in an attempt to achieve that goal.

2. Open skies all they way. Let foreigners own as much of U.S. carriers as they can buy, if they think it is a good investment; and let the SQs and Air Zimbabwes of the world be free to fly LAX-JFK and carry local traffic with their own crews if they want to, assuming they meet U.S. standards for safety. If they can thrive in the U.S. domestic market while home-grown carriers can't, let them.

 

[Bob Owens]

Two components:

1. I agree with let the let-the-industry-shrink idea. I just find it amusing that many airline workers adopt that same philospophy when (a) it means many of them would be out of jobs, and (B) I see the militant "no airline has ever shrunk to profitability!" mantra frequently when there is the slightest reduction in unprofitable routes or services in an attempt to achieve that goal.

2. Open skies all they way. Let foreigners own as much of U.S. carriers as they can buy, if they think it is a good investment; and let the SQs and Air Zimbabwes of the world be free to fly LAX-JFK and carry local traffic with their own crews if they want to, assuming they meet U.S. standards for safety. If they can thrive in the U.S. domestic market while home-grown carriers can't, let them.

Not all reductions result in layoffs. Theres always going to be a certain amount of attrition. If you shrink slowly you can shrink without anyone losing their jobs.

 

[FA Mikey]

Last year they lost nearly $1.5 billion , this year nearly $400 million, thats a $1.1 billion dollar improvement!!!

REALITY CHECK

AMR lost $390 million, or $1.39 per share. Excluding charges related to the sale and grounding of planes, it would have lost $319 million, or $1.14 per share.

In the same quarter last year, AMR lost $1.46 billion, or $5.83 per share, mostly for writing down the value of its fleet. Without the charges, the year-ago loss was $298 million.