Losses keep mounting at American Airlines

AP News
Posted: Mar 30, 2012 4:28 PM
Losses keep mounting at American Airlines

The parent company of American Airlines told a bankruptcy court that it lost $619 million last month as revenue declined from January and failed to offset costs including fuel and labor.

Since filing for bankruptcy in late November, AMR Corp. has lost $1.76 billion including $663 million in expenses related to the Chapter 11 reorganization. That's more than the $1.08 billion that the company lost in the first 11 months of last year.

AMR disclosed the February numbers in a filing Thursday in U.S. bankruptcy court in New York.

The February loss included $375 million in bankruptcy-reorganization costs. Most of that came from rejecting leases on aircraft and debt related to airport bond issues.

The company said that excluding costs related to bankruptcy and other special items, its operating loss was $186 million. AMR had operating losses of $5 million in January and $728 million in December. Its net losses, including all items, were $234 million in January and $904 million in December.

February revenue was $1.81 billion. The company didn't give a comparable figure for February 2011, but revenue declined 10.8 percent from $2.03 billion in January of this year, as passengers on American and American Eagle flew 8.2 percent fewer miles.

Fuel continued to be AMR's biggest expense, at $682 million in February, followed by labor at $584 million. This week, AMR asked the bankruptcy court to throw out American's contracts with unions for pilots, flight attendants and ground workers and to impose the company's pay and work demands.

AMR also reported paying $15 million to advisers in February. In separate filings this week, one of AMR's law firms, Debevoise & Plimpton LLC of New York, asked the bankruptcy court for $3.3 million to cover December billings and expenses, and Groom Law Group of Washington sought more than $900,000 for three months' work.

Management advisers Boston Consulting Group asked for $1.7 million for work in January and February. The firm could eventually get paid up to $11.7 million.

Despite the ongoing losses, AMR has managed to build up its cash stockpile this year. From $4.74 billion at the start of the year, it boosted cash and short-term investments, including restricted amounts, to $5.41 billion by Feb. 29.

Current liabilities also rose, however, to $9.38 billion as of Feb. 29 from $8.63 billion on Dec. 31.

AMR, American Airlines and other subsidiaries filed for bankruptcy protection in November. American plans to cut 13,000 jobs and get labor-cost concessions from its unions.