AMR has 2Q loss of $241M on bankruptcy costs

Associated Press Modified: July 18, 2012 at 9:00 am •  Published: July 18, 2012
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DALLAS (AP) — American Airlines is reaping higher fares and record revenue but still losing money.

American's parent, AMR Corp., said Wednesday that it narrowed its second-quarter loss to $241 million from $286 million a year ago. The results were weighed down by the cost of AMR's bankruptcy restructuring.

AMR said that without those costs, it would have earned $95 million, its first operating profit for the early-summer quarter since 2007.

The report offered glimmers of hope for a turnaround at American, which has tried but failed to fix itself several times in the past decade.

AMR set a record for revenue in any quarter, $6.46 billion. The company said revenue was helped by an increase in corporate-travel accounts and its fare-sharing ventures with British Airways, Iberia and Japan Airlines.

Fares rose 7 percent over last summer. Even with higher ticket prices, American and regional affiliate American Eagle sold 85.1 percent of the seats on their planes, another company record.

CEO Thomas Horton called the second quarter "a time of exceptional improvement."

American and AMR filed for bankruptcy protection in November after losing more than $10 billion since 2001. The company is seeking to cut labor costs and shed money-losing routes to return to profitability while fending off unsolicited takeover advances from smaller rival US Airways Group Inc.

To control its own fate, AMR will have to prove to its bankruptcy creditors that it can do better on its own than it could if paired with US Airways. AMR executives said they are making a quick recovery under bankruptcy protection.

"This improvement reflects only a fraction of our ongoing restructuring progress," Horton said. "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."

AMR has set a goal of cutting annual costs by $2 billion. Chief financial officer Bella Goren said AMR was "far along" in hitting that target in the future but that the effect on second-quarter spending was "very small." She declined to give figures.

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