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American Airlines’ parent company announces record $798m loss
AMR Corporation, the parent company of American Airlines, has reported the largest quarterly loss in its history but said there were signs that the industry was beginning to recover.
The company reported a fourth-quarter net loss of $798 million, or $5.17 per share, compared with a $47m profit for the last three months of 2000. The record loss left AMR with a deficit for the full-year of $1.8bn, compared with a profit of $770m in 2000.
“Influenced by the lingering effects of last September’s attacks, the final three months of 2001 were incredibly difficult,” said Don Carty, AMR’s chairman and chief executive officer. “Traffic, particularly business travel, was down significantly in the quarter, which – when combined with lower average fares – resulted in a record quarterly loss.”
The company announced it will be retiring its ageing fleet of Boeing 717 100-seater aircraft in June.
Mr Carty said that they have taken many positive steps to bolster their financial position. “We strengthened our cash reserves, despite the huge losses,” Carty said, “and further improved our position by cutting capacity, reducing capital spending, cutting operating costs, and further simplifying the fleet.”
In addition, Carty noted that “the commitment of our people to making American an industry leader was evident in December, when American registered an industry-leading completion factor of 99.7 percent and posted outstanding on-time performance.”
Looking to the future, Carty said AMR still has a long way to go to return to profitability, but is encouraged by a number of signs. “Traffic is improving, and we’re in much better shape than we might have been otherwise, thanks to a strong product, great people and strategies like fleet flexibility and simplification,” Carty said. “Our intent is to move forward aggressively in 2002 with marketing strategies to attract and retain customers, operating strategies that emphasize safety, security and on-time performance, and financing strategies that keep this Company’s financial foundations strong.”
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