American Reports $241 Million Q2 Loss Due to Bankruptcy Costs
By James Shillinglaw
July 18, 2012 10:34 PM
AMR Corporation, parent of American Airlines, which is operating under Chapter 11 bankruptcy protection, reported second quarter revenue of $6.5 billion, an increase of 5.5 percent year-over-year and the highest quarterly revenue in company history. It also reported a net loss of $241 million in the second quarter compared with a net loss of $286 million in the same period of 2011.
But much of that loss the airline attributed to costs associated with its bankruptcy. Excluding those reorganization and special item costs, American said it reported a net profit of $95 million, a $381 million improvement over the second quarter of 2011.
"Thanks to the great work of the entire American team, this was a time of exceptional improvement,” asserted Tom Horton, American’s chairman and CEO. “Our revenue performance has topped the industry for several months, leading to our first second quarter profit in five years excluding reorganization and special items. And this improvement reflects only a fraction of our ongoing restructuring progress. While there is still much to be done, we expect this momentum to build quickly as the new American re-emerges as an industry leader."
American’s revenue performance was driven by year-over-year yield improvement and a higher consolidated load factor of 84.5 percent – a record for any quarter as well. Domestic unit revenue improved 8.6 percent in the second quarter versus the same period last year and, for the second consecutive quarter, the company experienced unit revenue increases across all five of its hubs. These results were supported by strong corporate revenue growth.
International unit revenue increased 9 percent in the second quarter, driven by increased load factors across all entities, and strong yield performance. Premium cabin demand improved significantly in both the Atlantic and Pacific entities, generating unit revenue increases of 8.5 percent and 18.1 percent, respectively. American and its joint-business partners, British Airways and Iberia over the Atlantic, and Japan Airlines over the Pacific, have gained momentum in attracting high-value customers to the airlines' enhanced networks. The Latin American entity posted a 6.7 percent unit revenue increase in the second quarter of 2012, including yield improvements in Mexico and Central and South America.
AMR's consolidated operating expenses, excluding special items, were $6.2 billion, essentially flat with the same period last year. Excluding fuel costs, consolidated unit costs increased 2.3 percent year-over-year.