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AMR sees bigger fuel bill in 2006
E-mail | Print | | Disable live quotes By August Cole, MarketWatch
Last Update: 7:29 PM ET Mar 24, 2006
SAN FRANCISCO (MarketWatch) - American Airlines parent AMR Corp. said Friday it is bracing to pay more for fuel in 2006 than it paid last year, even though conservation efforts and fewer flights mean it will likely burn less.
Using AMR's own estimates, the company's 2006 fuel bill is set to rise about 10% to $6.19 billion, up from $5.62 billion in 2005.
AMR Corp. (AMR : AMR Corporation
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AMR26.89, -0.58, -2.1%) said it expects the price of jet fuel to average $1.97 a gallon this year, with an average price of $1.91 in the first quarter of 2006. In 2005, the company's average jet fuel price was about $1.74 a gallon.
The airline, in a filing with the Securities and Exchange Commission, predicted it will burn 3.14 billion gallons of jet fuel in 2006, down from 3.24 million last year.
Spokesman Tim Smith pinned the drop on more efficient operations, including route changes and efforts to cut the amount of time engines are run while a plane is on the ground.
AMR said in January it plans to pare back its domestic American Airlines capacity by 4% this year while international routes, with higher fares, become increasingly important. See full story.
About 32% of the company's fuel consumption has been hedged in the first quarter at $63 a barrel for West Texas Intermediate crude oil, according to the update. See Futures Movers.
For the year, the company is 18% hedged at $60 a barrel.
American Airlines, like other carriers, has gone to great lengths to reduce fuel consumption because of the steep rise in jet fuel prices over the past few years. Fuel is typically an airline's second biggest operating cost after labor. See full story.
Also in the SEC filing, the company said expects its first-quarter consolidated unit revenue will rise between 9.9% and 10.9% from last year while it sees its mainline unit revenue increasing from 9.2% to 10.2%.
The AMR consolidated first-quarter cost per available seat mile is expected at 11.36 cents, or 8.13 cents excluding fuel. For the year, the figure is 11.25 cents, or 7.95 cents excluding fuel.
Cash and short-term equivalents should top $4.5 billion at the end of the first quarter, the company said.
AMR (AMR : AMR Corporation
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Last: 26.89-0.58-2.11%
6:40pm 03/24/2006
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AMR26.89, -0.58, -2.1%) stock ended Friday down 2.1% to $26.89. See Airline Stocks.
So far in 2006, AMR shares are up 24% as some analysts' expectations forecast a profit for the year. See Ratings Game
E-mail | Print | | Disable live quotes By August Cole, MarketWatch
Last Update: 7:29 PM ET Mar 24, 2006
SAN FRANCISCO (MarketWatch) - American Airlines parent AMR Corp. said Friday it is bracing to pay more for fuel in 2006 than it paid last year, even though conservation efforts and fewer flights mean it will likely burn less.
Using AMR's own estimates, the company's 2006 fuel bill is set to rise about 10% to $6.19 billion, up from $5.62 billion in 2005.
AMR Corp. (AMR : AMR Corporation
News , chart, profile, more
Last: 26.89-0.58-2.11%
6:40pm 03/24/2006
Add to portfolio
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Financials
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AMR26.89, -0.58, -2.1%) said it expects the price of jet fuel to average $1.97 a gallon this year, with an average price of $1.91 in the first quarter of 2006. In 2005, the company's average jet fuel price was about $1.74 a gallon.
The airline, in a filing with the Securities and Exchange Commission, predicted it will burn 3.14 billion gallons of jet fuel in 2006, down from 3.24 million last year.
Spokesman Tim Smith pinned the drop on more efficient operations, including route changes and efforts to cut the amount of time engines are run while a plane is on the ground.
AMR said in January it plans to pare back its domestic American Airlines capacity by 4% this year while international routes, with higher fares, become increasingly important. See full story.
About 32% of the company's fuel consumption has been hedged in the first quarter at $63 a barrel for West Texas Intermediate crude oil, according to the update. See Futures Movers.
For the year, the company is 18% hedged at $60 a barrel.
American Airlines, like other carriers, has gone to great lengths to reduce fuel consumption because of the steep rise in jet fuel prices over the past few years. Fuel is typically an airline's second biggest operating cost after labor. See full story.
Also in the SEC filing, the company said expects its first-quarter consolidated unit revenue will rise between 9.9% and 10.9% from last year while it sees its mainline unit revenue increasing from 9.2% to 10.2%.
The AMR consolidated first-quarter cost per available seat mile is expected at 11.36 cents, or 8.13 cents excluding fuel. For the year, the figure is 11.25 cents, or 7.95 cents excluding fuel.
Cash and short-term equivalents should top $4.5 billion at the end of the first quarter, the company said.
AMR (AMR : AMR Corporation
News , chart, profile, more
Last: 26.89-0.58-2.11%
6:40pm 03/24/2006
Add to portfolio
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Financials
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AMR26.89, -0.58, -2.1%) stock ended Friday down 2.1% to $26.89. See Airline Stocks.
So far in 2006, AMR shares are up 24% as some analysts' expectations forecast a profit for the year. See Ratings Game
