Wednesday, 17 October 2012

American Airlines parent AMR profit tops estimates


American Airlines parent AMR Corp reported higher-than-expected adjusted quarterly earnings on Wednesday as fuel costs fell and international ventures aided revenue.
The company, which filed for Chapter 11 bankruptcy protection last November and is evaluating a potential merger with rival US Airways Group , cited progress in reducing costs.
Pilot absences and maintenance issues that led to much-publicized flight cancellations and delays at American in the second half of September had no material effect on third-quarter results, the company said.
Revenue rose nearly 1 percent despite the flight cancellations as business agreements with British Airways and Iberia in the Atlantic region and Japan Airlines<9201.T> in the Pacific brought American more higher-paying business customers.
"The revenue gains ... show that American is on the right track in a difficult economic environment," said Maxim Group aerospace analyst Ray Neidl.
Still, he said, American had room for improvement, particularly in terms of operating margin. AMR reported quarterly operating margin of 4.1 percent. Neidl said he expects 9 percent at Delta Air Lines and 7.4 percent at US Airways .
Virasb Vahidi, American Airlines chief commercial officer, said the carrier's international business agreements helped drive demand for premium cabins.
"We have really been able to leverage these agreements to increase our yields by taking advantage of the distribution and selling and marketing power of our partners on the other side of the ocean," Vahidi said.
For example, he said unit revenue, an industry measure of pricing power, rose 15.9 percent in the Pacific region in the third quarter.
AMR's third-quarter net loss widened to $238 million, or 71 cents a share, from $162 million, or 48 cents a share, a year earlier. The latest results included $348 million in costs tied to worker severance and the Chapter 11 reorganization.
Excluding one-time items, AMR posted a profit of 33 cents a share, topping analysts' average forecast by 5 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 0.8 percent to $6.43 billion. Operating expenses were up 0.6 percent, but fuel costs fell 3.3 percent.
American Airlines, which offers more than 3,500 daily flights on average, said it plans to hire more than 1,500 flight attendants over the next year. It cited a big response to a recent voluntary program in which more than 2,250 flight attendants opted to leave the company.
Shares of AMR were little changed at 37 cents in morning trading, while other major U.S. airlines were mixed. Delta was up 7 cents to $10.06, US Airways was down 2 cents to $11.56, and United Continental was up 3 cents to $20.38.
http://news.yahoo.com/american-airlines-parent-amr-posts-wider-loss-121514591--finance.html

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