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American Airlines warns of slow recovery
American Airlines said continued weakness in business travel had hindered the airline’s performance as it revealed a huge jump in first quarter losses and warned that recovery would “be a long and slow process”.
AMR, American’s parent, reported on Wednesday a first quarter net loss of $575m, compared with a net loss of $43m in the first quarter of 2001.
Don Carty, AMR’s chairman and chief executive, said: “There is no question that our business overall is improving and there are a number of particularly encouraging signs with regard to our day-to-day operations. But the facts are that business travel, which historicaly constitutes a major portion of our business, is not rebounding the way leisure travel is, and average fares are down because of heavy discounting.”
“That, combined with rising labour, security and insurance costs, made for a very tough first quarter,” Mr Carty said. “And, at the current slow pace of revenue recovery, I expect we will post a loss in the second quarter as well.”
Mr Carty added: “Day in and day out, we are running a much better airline, and our key financial indicators are much improved over where they were late last year in the aftermath of last September’s tragedies. The problem is that we are coming back from a disastrous starting point, and full recovery is going to be a long and slow process.”
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