Characterizing the fourth quarter as "a disappointing end to a difficult year" and saying that 2005 "doesn't look a whole lot better," AMR Corp. Chairman and CEO Gerard Arpey yesterday reported that the parent of American Airlines lost $387 million in the period, significantly worse than the loss of $111 million recorded in the 2003 fourth quarter.
Excluding special charges, the current-period loss widened to $473 million compared to just $95 million in 2003. Arpey cited "high fuel prices and a tough revenue environment" for the dismal results, the same factors that "plagued the industry throughout 2004." AMR noted that it paid $477 million more for fuel in the fourth quarter than it would have if prices had been at 2003 levels. In fact, it would have earned $90 million for the quarter at the year-ago prices.
For the full year, AMR's net loss totaled $761 million, narrowed from $1.23 billion in 2003. Excluding special items, the 2004 loss widened to $896 million while the 2003 deficit rose to $1.47 billion.
Fourth-quarter operating revenues totaled $4.54 billion, up 3.4% from the 2003 quarter. Operating expenses climbed 6% to $4.9 billion, resulting in an operating loss of $355 million versus a loss of $227 million in 2003. Excluding special charges, the losses were $295 million and income of $103 million in 2004 and 2003 respectively.
Yield per RPM at American fell 6.7% to 11.32 cents while passenger revenue per ASM dropped 3.1% to 8.41 cents. Cost per ASM was flat at 10.25 cents but declined 10% year-over-year if fuel is excluded.
Full-year revenues totaled $18.64 billion, up 6.9%, while total operating expenses rose 2.8% to $18.79 billion and operating loss narrowed to $144 million from $844 million. If fuel prices had stayed at 2003 levels, AMR said it would have reported full-year earnings of $345 million. The carrier expects to lose money again in the 2005 first quarter.
Commenting on the impact of Delta's fare reform, which American has matched in some respects, Arpey said that "the initial impact will be negative" but saw three positives emerging: Share shift as passengers take advantage of new lower nonstop fares on AA, traffic stimulation and a restructuring of the carrier's corporate contracts to reflect the lower business fare levels. American also is experiencing faster growth of sales at aa.com since it changed its own structure in response to Delta's action.--Perry Flint
ATW Online
Dateline: Thursday January 20, 2005
We wish AA, one of the most favorite airlines in the region, the best of luck.
Excluding special charges, the current-period loss widened to $473 million compared to just $95 million in 2003. Arpey cited "high fuel prices and a tough revenue environment" for the dismal results, the same factors that "plagued the industry throughout 2004." AMR noted that it paid $477 million more for fuel in the fourth quarter than it would have if prices had been at 2003 levels. In fact, it would have earned $90 million for the quarter at the year-ago prices.
For the full year, AMR's net loss totaled $761 million, narrowed from $1.23 billion in 2003. Excluding special items, the 2004 loss widened to $896 million while the 2003 deficit rose to $1.47 billion.
Fourth-quarter operating revenues totaled $4.54 billion, up 3.4% from the 2003 quarter. Operating expenses climbed 6% to $4.9 billion, resulting in an operating loss of $355 million versus a loss of $227 million in 2003. Excluding special charges, the losses were $295 million and income of $103 million in 2004 and 2003 respectively.
Yield per RPM at American fell 6.7% to 11.32 cents while passenger revenue per ASM dropped 3.1% to 8.41 cents. Cost per ASM was flat at 10.25 cents but declined 10% year-over-year if fuel is excluded.
Full-year revenues totaled $18.64 billion, up 6.9%, while total operating expenses rose 2.8% to $18.79 billion and operating loss narrowed to $144 million from $844 million. If fuel prices had stayed at 2003 levels, AMR said it would have reported full-year earnings of $345 million. The carrier expects to lose money again in the 2005 first quarter.
Commenting on the impact of Delta's fare reform, which American has matched in some respects, Arpey said that "the initial impact will be negative" but saw three positives emerging: Share shift as passengers take advantage of new lower nonstop fares on AA, traffic stimulation and a restructuring of the carrier's corporate contracts to reflect the lower business fare levels. American also is experiencing faster growth of sales at aa.com since it changed its own structure in response to Delta's action.--Perry Flint
ATW Online
Dateline: Thursday January 20, 2005
We wish AA, one of the most favorite airlines in the region, the best of luck.
