American Airlines posts $390 million second-quarter loss
American Airlines parent AMR Corp. said a “very difficult revenue environment” drove a second-quarter net loss of $390 million, narrowed 73.3% from a $1.45 billion deficit in the year-ago period when heavy noncash impairment charges dragged down the bottom line.
But the loss actually was widened from a $298 million deficit last year absent special charges. The quarter was “obviously disappointing,” Chairman and CEO Gerard Arpey said. “We’ve got to continue to anticipate a tough environment.”
American was the first major US airline to report its second quarter earnings, and its results easily beat expectations, sending its shares higher.
Airlines are struggling to gain financial altitude in a lingering recession that has drained demand for business travel, especially on lucrative international routes.
“International passengers and (revenue) will be down more significantly than domestic. I think that’ll probably be the big thing,” said Morningstar analyst Basili Alukos.
He said he was encouraged by AMR’s plans for additional capacity cuts and by the increase in ancillary revenue the carrier has drawn from new fees for in-flight perks.
The airline industry responded to weaker recessionary demand last year by downsizing. AMR said in June that it increased its planned 2009 capacity reductions to 7.5 percent versus 2008.