This article from NYTimes.com has been sent to you by psa188@juno.com. Bye-bye AA "717"s psa188@juno.com /-------------------- advertisement -----------------------\ Share the spirit with a gift from Starbucks. Our coffee brewers & espresso machines at special holiday prices. http://www.starbucks.com/shop/subcategory.asp?category_name=Sale/Clearance&ci=274&cookie_test=1 \----------------------------------------------------------/ Parent of American Airlines Posts Record Quarterly Loss January 16, 2002 By REUTERS Filed at 9:38 a.m. ET DALLAS (Reuters) - AMR Corp. (news/quote) (AMR.N), parent of American Airlines, on Wednesday reported a record net loss of $798 million in the fourth quarter, as revenues at the world's No. 1 air carrier dropped 22 percent on a weak economy and fear of flying after the Sept. 11 attacks. Fort Worth, Texas-based AMR, which acquired TWA last year, said the loss, including all special items, amounted to $5.17 per share, compared with a net profit of $47 million, or 29 cents per share, a year earlier. It also said it was speeding up the retirement of its fleet of Boeing (news/quote) 717 100-seater aircraft to this June under an agreement with Boeing Co. (BA.N). AMR said last week it was considering the move as part of a longer-term program to save training and maintenance costs by flying a limited number of plane types. Excluding the one-time items, mainly charges for idling planes and employees but also government emergency aid of $29 million, AMR said the loss was $734 million, or $4.75 per share, compared with earnings of $56 million, or 34 cents, before special items a year earlier. ``It came in better than expected,'' said airlines analyst Susan Donofrio at Deutsche Banc Alex. Brown, referring to the operating loss. Donofrio had forecast a loss of $5 per share. Wall Street analysts expected a loss between $4 and $6 per share, with a mean estimated loss of $5.08, according to research firm Thomson Financial/First Call. Merrill Lynch (news/quote) analyst Michael Linenberg said the better-than-expected results were driven by cost reductions, with AMR's total operating costs of $4.9 billion less than Merrill's projected $5.3 billion. ``Costs benefited from a 70 cents fuel price per gallon (a decline of 232202110ver last year) versus our expected 73 cents per gallon,'' Linenberg wrote in a research note. Don Carty, AMR's chairman and chief executive, said the last three months of 2000 were difficult because of the lingering effects of the Sept. 11 attacks. ``Traffic, particularly business travel, was down significantly in the quarter, which -- when combined with lower average fares -- resulted in a record quarterly loss,'' he said. The previous record loss was $414 million in the third quarter last year, including $397 million in one-time losses from the Sept. 11 attacks and $508 million in government emergency aid for the airline industry. Total operating revenues in the fourth quarter dropped more than $1 billion to $3.8 billion from $4.9 billion a year earlier, as AMR cut the number of flights because of reduced demand and lowered fares to win back passengers. At American Airlines, available seat miles, a measure of overall capacity, were down more than 13 percent, while revenue yield per passenger mile, a measure of average fares, was down 15 percent. Carty said AMR took positive steps to bolster its financial position, including strengthening cash reserves, cutting capacity, reducing capital spending and cutting operating costs. Analysts said AMR's performance was about as good as could be expected in a period plagued with bad news. Two American jetliners, as well as two UAL Corp. (news/quote)'sUnited Airlines planes, were crashed by hijackers in the Sept. 11 attacks. Last November, an American Airbus A300 crashed on takeoff in New York. In December, a man was caught allegedly trying to light explosives in his shoes on a transatlantic American flight. ``That's probably made life more difficult for them. But they are one of the better managed airlines in the U.S.,'' said Daniel Solon, London-based analyst at Avmark International Ltd. ``They've done about as well as can be expected under the circumstances. The results are within the normal range of expectations,'' Solon said. Shares of AMR closed Tuesday up $1.24 at $25.79 on the New York Stock Exchange. The stock has lost 11 percent since Sept. 11 but has outperformed the American Stock Exchange airlines index by about 11 percent. http://www.nytimes.com/reuters/business/business-airlines-amr-earns.html?ex=1012204428&ei=1&en=0daa09114ad66ac8 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact Alyson Racer at alyson@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2001 The New York Times Company