Actually the loss for the quarter was $413 million. However there was roughly 230 million in "special items" ( I love those, they always make you look like you are doing worse than you are when you want more from your employees). So the tangible loss would be roughly 180 million for the quarter.
Also out of those 27 jets getting permanently parked, 24 of those are already in temporary storage, so we are shedding two more 80s, however we are adding 2 more 777s.
I let Gerard tell you the rest.
Dear Fellow Employee:
Today we closed the books on another difficult year financially, reporting a net loss for the fourth quarter of 2005 of $413 million, excluding the impact of special items. That brings our net loss for the year to $681 million, which compares to 2004's loss, without special items, of $896 million.
While this result illustrates, all too clearly, the hard road left in front of us, we can take pride in a number of significant 2005 accomplishments. First among them is the fact that we were able -- unlike many of our competitors -- to withstand a massive increase in the price of fuel and remain solvent. What's more, despite a $1.7 billion increase in fuel expense, we managed to earn our first annual operating profit (profit before interest expense on our debt) since 2000. Holding fuel constant, we were able to lower our unit costs for the third year in a row, and narrow the gap between our costs and those of the low cost segment of the industry.
Strong demand and a number of AA scheduling, product and pricing initiatives enabled us to achieve a record load factor in every month of the year, and regain a solid revenue premium versus the industry. While taking care of record numbers of passengers, we improved both our on-time ranking and our completion factor. Our improved performance led to AIP payments in seven out of twelve months. We continued to fund our pension plans, to the tune of $310 million. And most importantly, we maintained control of our destiny.
While none of these achievements diminish the challenges that lie ahead of us, the Performance Leadership Initiative we launched last year has given us a much more complete picture of how our performance stacks up against the best in class in the industry. As 2006 unfolds, we are going to be working together to capitalize on the insights flowing out of the PLI process, and I am confident that it will help us build on the progress we made together in 2005.
My confidence in our ability to complete the turnaround we have started is apparently shared by many in the financial community. As you may know, the price of AMR stock today is significantly higher than it was a year ago, and dramatically higher than it was in 2003 when we launched the Turnaround Plan. That's obviously good news for all the employees who received stock at the time, and it's also good news for some members of our management team who participate in our long-term incentive compensation program and whose total compensation varies from year to year depending on how well our stock performs. Realizing this is an important issue for some of you, I want to lay out the basic facts as simply and clearly as I can.
In April, the AMR stock performance unit plan -- which pays out depending on how our stock performs compared to our peer group -- will make a payment, just as last year's plan did. This year's payments will be much larger than last year's, for two simple reasons. First, as I mentioned, our stock has significantly increased in price. And second, that stock price increase was much larger than that of any of the members of our peer group.
I know that management compensation is a subject that gets a lot of interest and that's why, in 2003, we created the executive compensation web page on Jetnet. We update this information on a regular basis, and you can find it by clicking on the pay tab and then the compensation overview. Informed discussion, on this or any other topic, is not only healthy, it is in my view a prerequisite for any successful company.
I want to close this letter by thanking you, as always, for the skill, the energy and the passion you bring to our company. Every one of us has both a stake and an important role to play in the future of American Airlines. We have another challenging year in front of us and we are on the right track.
Sincerely yours,
Gerard Arpey
