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AMR Fourth Quarter and Full Year 2009 Results


 

Fourth Quarter and Full Year 2009 Results


Gerard J. Arpey
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Thomas W. Horton
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AMR Corporation, the parent company of American Airlines, Inc., today reported a net loss of $344 million, or $1.03 per share, for the fourth quarter of 2009. The fourth quarter 2009 results include the negative impact of $177 million in non-cash special items (see release for details). Excluding these special items and the non-cash tax item, the Company lost $415 million, or $1.25 per share, in the quarter.

The results for the fourth quarter of 2009 compare to a net loss of $347 million, or $1.24 per share, for the fourth quarter of 2008. The fourth quarter 2008 results included a $23 million charge and a $103 million non-cash pension settlement charge (see release for more details). Excluding those special items, the Company lost $221 million, or $0.79 per share, in the fourth quarter of 2008.

For all of 2009, AMR recorded a net loss of $1.5 billion, or $4.99 per share, compared to a loss of $2.1 billion, or $8.16 per share, for 2008. Excluding special items and the non-cash tax item, the Company lost $1.4 billion, or $4.63 per share, for all of 2009, compared to a loss of $1.2 billion, or $4.76 per share, in 2008.

Operating Results

  • While the revenue and demand environment has remained challenging, the Company's year-over-year declines in consolidated revenue, cargo revenue and mainline passenger unit revenue have narrowed sequentially in the third and fourth quarters.
  • AMR reported fourth quarter consolidated revenues of approximately $5.1 billion, a decrease of 7.4 percent year over year reflecting continued impact from the economy.
  • The Company's cargo revenue declined by 16.4 percent to $164 million in the fourth quarter compared to the same period in 2008.
  • Other revenues grew 6.8 percent to $582 million in the fourth quarter, compared to the fourth quarter of 2008. Other revenue increased 5.4 percent to $2.3 billion for the full year of 2009 compared to 2008.
  • American's mainline passenger revenue per available seat mile (unit revenue) declined by 4.3 percent in the fourth quarter compared to the year-ago quarter.
  • Mainline capacity, or total available seat miles, in the fourth quarter decreased by 4.9 percent compared to the same period in 2008.
  • American's mainline cost per available seat mile (unit cost) in the fourth quarter was essentially flat year over year, in part due to lower fuel prices.
  • Taking into account the impact of fuel hedging, AMR paid $2.17 per gallon for jet fuel in the fourth quarter versus $2.60 a gallon in the fourth quarter of 2008, a 16.4 percent decrease.
  • Excluding fuel, mainline unit costs in the fourth quarter of 2009 increased by 8.3 percent year over year, driven by reduced capacity, higher pension expenses, higher materials and repairs expenses, and investments in dependability initiatives.

Balance Sheet Update

  • AMR ended the fourth quarter with approximately $4.9 billion in cash and short-term investments, including a restricted balance of $460 million, compared to a balance of $3.6 billion in cash and short-term investments, including a restricted balance of $459 million, at the end of the fourth quarter of 2008 (see release for details).
  • AMR's Total Debt was $16.1 billion at the end of the fourth quarter of 2009, compared to $15.1 billion a year earlier.
  • AMR's Net Debt was $11.7 billion at the end of the fourth quarter, compared to $12.0 billion in the fourth quarter of 2008.
Guidance

AMR expects its full-year mainline capacity to increase by 0.9 percent in 2010 compared to 2009. On a consolidated basis, AMR expects full-year capacity to increase by 1.3 percent in 2010 compared to 2009.

  • The Company's 2010 capacity levels include the reinstatement of flying that was canceled in 2009 due to the H1N1 virus and the launch of Chicago-Beijing service, which was deferred from 2009.
  • The consolidated cost per seat mile, excluding fuel, for 2010 is expected to increase 1.1 percent.
  • All of the expected 1.1 percent increase in consolidated cost per seat mile, excluding fuel, for 2010 is due to anticipated higher revenue-related expenses (such as booking fees and commissions) and financing costs related to Boeing 737-800 and other aircraft to be delivered in 2009 and 2010.
  • Based on the Jan. 8 forward curve, AMR is planning for an average system price of $2.36 per gallon in the first quarter of 2010 and $2.42 per gallon for all of 2010.
  • First quarter and full-year 2010 Hedging guidance is contained in the press release.
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