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MR Corporation Reports a First Quarter Loss of $92 Million, a $70 Million Improvement Over Last Year's First Quarter Loss of $162 Million
Wednesday April 19, 11:07 am ET
AMR Achieves the Improvement Despite the Impact of High Fuel Costs
First Quarter Results Also Are Marked By an Operating Profit and Positive Operating Cash Flow Performance
FORT WORTH, Texas, April 19 /PRNewswire-FirstCall/ -- AMR Corporation (NYSE: AMR - News), parent company of American Airlines, Inc., today reported a net loss of $92 million in the first quarter of 2006, or $.49 per share, as compared to a net loss of $162 million, or $1.00 per share, in the first quarter of 2005. First quarter 2005 results included a benefit of $69 million, or $.43 per share, related to certain excise tax refunds.
"A loss of any size is never satisfactory," said AMR Chairman and CEO Gerard Arpey, "but it is somewhat gratifying to have improved our first quarter results by $139 million year over year excluding last year's excise tax refunds, despite the Company paying $349 million more for fuel because of higher fuel prices during the first quarter of 2006 versus the same period last year." Arpey also pointed out that the Company achieved a first quarter operating profit of $115 million, and had positive operating cash flow for the period.
For the quarter, American's passenger revenue per available seat mile was up 10.8 percent year over year. American's load factor -- or percentage of seats filled -- for the first quarter was 77.2 percent, up 1.8 points over the first quarter of 2005, while yield, representing average fares, was up 8.2 percent. Overall, AMR's revenue from all sources -- passenger, cargo and other categories -- grew in the first quarter by $594 million, or 12.5 percent, year over year.
"Thanks to the hard work of our people and the changes we have made, we are creating new streams of revenue and are bringing additional customers into the network. These efforts are driving unit revenues to near 2000 levels," Arpey said. "Unfortunately, the price of fuel has increased by more than 143 percent since then, adding $3.6 billion to our annual cost structure. Even with strong demand for air travel, we have been able to pass only a very small portion of that increase on to our customers." On a year over year basis, American's mainline cost per available seat mile was up by 10.3 percent. Excluding fuel, mainline unit costs increased 2.9 percent versus the first quarter of last year.
Under the tenets of its Turnaround Plan and working collaboratively with its employees and unions, American continues to focus sharply on numerous cost savings initiatives as it works to achieve sustained profitability. One such step is a flattening of the summer peak schedule that allows the airline to reduce the extra resources that it carries year-round to support the summer peak. As a result, American is placing 27 of its MD80 aircraft into temporary storage in phases by July 1, 2006, to improve the overall efficiency of its operations.
In an initiative to reduce distribution costs, American at the end of March successfully renegotiated its agreement with Worldspan, a global distribution system (GDS) that enables an airline to display its products over an extensive network of travel agencies. The new arrangement provides American with substantially lower costs and greater flexibility in continuing to adopt new cost-effective technologies as they become available. American is in discussions with some of the other GDSs as well.
Despite the continuing challenges of a very difficult industry, Arpey said he is pleased with the airline's progress to date, and expects a very robust summer. "It looks like another very busy summer for our industry," he said. "Our planes should be full, which among other things means we have a golden opportunity -- if we stay focused on running a good airline, controlling costs, and giving our customers what they truly value -- to build on the momentum reflected in the financial results we are reporting today."
Arpey pointed out that as of April 14, AMR had contributed $120 million to its various defined benefit plans this year.
AMR ended the quarter with $4.8 billion in cash and short-term investments, including a restricted balance of $510 million.
Wednesday April 19, 11:07 am ET
AMR Achieves the Improvement Despite the Impact of High Fuel Costs
First Quarter Results Also Are Marked By an Operating Profit and Positive Operating Cash Flow Performance
FORT WORTH, Texas, April 19 /PRNewswire-FirstCall/ -- AMR Corporation (NYSE: AMR - News), parent company of American Airlines, Inc., today reported a net loss of $92 million in the first quarter of 2006, or $.49 per share, as compared to a net loss of $162 million, or $1.00 per share, in the first quarter of 2005. First quarter 2005 results included a benefit of $69 million, or $.43 per share, related to certain excise tax refunds.
"A loss of any size is never satisfactory," said AMR Chairman and CEO Gerard Arpey, "but it is somewhat gratifying to have improved our first quarter results by $139 million year over year excluding last year's excise tax refunds, despite the Company paying $349 million more for fuel because of higher fuel prices during the first quarter of 2006 versus the same period last year." Arpey also pointed out that the Company achieved a first quarter operating profit of $115 million, and had positive operating cash flow for the period.
For the quarter, American's passenger revenue per available seat mile was up 10.8 percent year over year. American's load factor -- or percentage of seats filled -- for the first quarter was 77.2 percent, up 1.8 points over the first quarter of 2005, while yield, representing average fares, was up 8.2 percent. Overall, AMR's revenue from all sources -- passenger, cargo and other categories -- grew in the first quarter by $594 million, or 12.5 percent, year over year.
"Thanks to the hard work of our people and the changes we have made, we are creating new streams of revenue and are bringing additional customers into the network. These efforts are driving unit revenues to near 2000 levels," Arpey said. "Unfortunately, the price of fuel has increased by more than 143 percent since then, adding $3.6 billion to our annual cost structure. Even with strong demand for air travel, we have been able to pass only a very small portion of that increase on to our customers." On a year over year basis, American's mainline cost per available seat mile was up by 10.3 percent. Excluding fuel, mainline unit costs increased 2.9 percent versus the first quarter of last year.
Under the tenets of its Turnaround Plan and working collaboratively with its employees and unions, American continues to focus sharply on numerous cost savings initiatives as it works to achieve sustained profitability. One such step is a flattening of the summer peak schedule that allows the airline to reduce the extra resources that it carries year-round to support the summer peak. As a result, American is placing 27 of its MD80 aircraft into temporary storage in phases by July 1, 2006, to improve the overall efficiency of its operations.
In an initiative to reduce distribution costs, American at the end of March successfully renegotiated its agreement with Worldspan, a global distribution system (GDS) that enables an airline to display its products over an extensive network of travel agencies. The new arrangement provides American with substantially lower costs and greater flexibility in continuing to adopt new cost-effective technologies as they become available. American is in discussions with some of the other GDSs as well.
Despite the continuing challenges of a very difficult industry, Arpey said he is pleased with the airline's progress to date, and expects a very robust summer. "It looks like another very busy summer for our industry," he said. "Our planes should be full, which among other things means we have a golden opportunity -- if we stay focused on running a good airline, controlling costs, and giving our customers what they truly value -- to build on the momentum reflected in the financial results we are reporting today."
Arpey pointed out that as of April 14, AMR had contributed $120 million to its various defined benefit plans this year.
AMR ended the quarter with $4.8 billion in cash and short-term investments, including a restricted balance of $510 million.
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