=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2002/02/28/f= inancial1442EST0159.DTL ---------------------------------------------------------------------- Thursday, February 28, 2002 (AP) American Airlines' parent expects large loss in first quarter DAVID KOENIG, AP Business Writer (02-28) 15:13 PST DALLAS (AP) -- American Airlines' parent company said Thursday that it expects to post a "sizable" loss in the first quarter and a second straight money-losing year as it grapples with the sharp decline in air travel that followed the Sept. 11 terrorist attacks. AMR Corp. made the comments in a filing with the U.S. Securities and Exchange Commission, but didn't offer a precise estimate of its expected losses. The consensus estimate by analysts surveyed by Thomson Financial/First Call was that AMR would lose $3.30 a share in the first quarter and $4 a share for all of 2002. That would amount to a loss of more than $450 million in the first quart= er and more than $600 million for all of 2002. The company lost $1.76 billion last year. Raymond Neidl, an analyst for ABN Amro, said the telling indicator will = be whether airlines can improve their financial health as the year goes along. He predicted that AMR would turn a modest profit in the third quarter, traditionally a strong period for airlines. American and most other major carriers were already losing money before Sept. 11, as the economic slowdown caused companies to cut travel budgets. Traffic plunged after the terrorist attacks, leading the airlines to cut fares. Fort Worth-based AMR has more seats than a year ago, thanks to its acquisition of Trans World Airlines. But it noted that predicting how many people will fly "continues to remain challenging" because of the lingering effects of the terrorist attacks. The company said it expected costs to rise 3 percent to 5 percent this year due to increases for wages, benefits, security, insurance and interest payments. AMR added that it could be hurt if it can't reach agreements with labor unions. It is negotiating a new contract with pilots, who expect to match big raises given recently to counterparts at United and Delta airlines. "That's the major risk. Labor agreements with pilots are always very difficult," said the ABN Amro analyst Neidl. "And you have the extra problem here with the TWA integration." AMR bought TWA last year and finds itself in the middle of a dispute between unions for two sets of pilots. The union representing American pilots has filed a lawsuit to put about half of TWA pilots at the bottom of its seniority ladder. AMR, which also operates the American Eagle commuter line, announced pla= ns to cut 20,000 jobs after Sept. 11. American cut its capacity about 15 percent by reducing flights and idling 66 planes. AMR said it has sold 13 of the planes to Federal Express and was trying to sell the rest. In trading Thursday on the New York Stock Exchange, AMR shares fell 96 cents a share, to close at $26.10. =20 ---------------------------------------------------------------------- Copyright 2002 AP