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AMR Announces Second Quarter Results


 

AMR Announces Second Quarter Results


Gerard J. Arpey
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Thomas W. Horton
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AMR Corporation announced a second quarter net loss of $390 million as continued weakness in the economy dampened demand and revenue. Excluding special items, the second quarter loss was $319 million, which compares to a loss of $298 million in second quarter 2008.

Despite these challenges, the company continued to focus on liquidity, fleet renewal, aligning capacity with demand, and customer dependability. Among accomplishments from the second quarter and to date:

  • Added $66 million in liquidity through an aircraft sale-leaseback transaction
  • Completed $520 million public offering that adds liquidity and provides financing for 16 of the company’s firm Boeing 737-800 orders
  • With the public offering and other financing commitments, the company now has committed financing, subject to certain terms and conditions, expected to cover all firm 737 orders through 2011
  • Announced plans to take eight additional Boeing 737-800s for narrowbody replacement, increasing 737 deliveries to 84 for 2009 through 2011
  • Increased planned 2009 capacity reductions to 7.5 percent versus 2008
  • Continued to improve customer dependability metrics

“The challenges for our industry and company have continued throughout 2009,” said AMR Chairman and CEO Gerard Arpey. “With ongoing global economic weakness and the resulting effect on travel demand, revenues are down sharply from a year ago. The spot price of oil, while much lower than this time last year, has risen since early this year and remains volatile. Even as we face these hurdles, however, we continue to focus on improvements in areas within our control. We bolstered liquidity and obtained additional committed financing related to our fleet renewal program. We also improved in our dependability and customer experience measures and announced additional capacity reductions as we seek the right balance between supply and demand.”

Arpey noted the hard work and commitment of employees related to continuing improvements in dependability and customer experience metrics. In addition, he reiterated expectations that American and four of its fellow oneworld Alliance members will receive DOT approval of their application for global antitrust immunity this fall, and the companies look forward to continuing to demonstrate the public benefits of their plans to regulators in the European Union. With this approval, American, British Airways and Iberia plan to launch a joint business relationship that will improve travel options and customer benefits on flights between North America and Europe.

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