This article from NYTimes.com has been sent to you by psa188@juno.com. AMR Reports Smaller Fourth - Quarter Loss January 22, 2003 By THE ASSOCIATED PRESS Filed at 9:39 a.m. ET DALLAS (AP) -- American Airlines' parent company posted a narrower loss of $529 million in the fourth quarter, boosting its losses for the full year to more than $3.5 billion. The world's largest air carrier blamed continued fear over terrorism and possible war in Iraq as well as costly fuel and a lackluster economy on the latest shortfall. But its loss for the quarter was smaller than Wall Street had expected. Meanwhile, low-fare carrier Southwest Airlines reported its profit fell 33 percent in the fourth quarter, but also exceeded Wall Street expectations and bucked the industry trend of red ink. AMR Corp. American Airlines' parent AMR Corp. said it lost $3.39 per share for the three months ended Dec. 31 compared with a net loss of $798 million, or $5.17 per share, a year earlier. Revenue rose to $4.19 billion from $3.80 billion a year earlier. Analysts surveyed by Thomson First Call expected AMR would lose $3.73 a share for the quarter. For 2002, the company lost $3.5 billion, or $22.57 per share, compared with a 2001 net loss of $1.8 billion, or $11.43 per share. Revenue fell to $17.3 billion from $19 billion in 2001. For Fort Worth-based American, which is losing millions of dollars each day and must borrow to meet payroll, such financial results are ``unsustainable,'' said Don Carty, AMR chairman and chief executive. ``While there are many factors that impacted our results during 2002, including a sluggish economy, high fuel prices, lingering concerns over terrorism and the possibility of a war in the Middle East, the core issue for our company remains a cost structure that is out of step with the revenue environment facing domestic airlines,'' Carty said in a prepared statement. ``As we've been discussing with our employees, we believe that a permanent shift has occurred in the airline revenue environment which will require us to reduce our annual costs by at least four billion dollars,'' he said. Airline executives say they have only been able to identify about half of those savings by cutting flights, mothballing planes and laying off employees. The carrier has reached out to unions representing pilots, flight attendants and other employees, with Carty saying restructuring of labor agreements is also a key to renewed profitability. American, Carty has said, does not plan to follow United, the world's second-biggest airline, which has filed for Chapter 11 bankruptcy protection. AMR has $2.8 billion in cash and liquid assets, according to Securities and Exchange Commission filings. Southwest Airlines The Dallas-based carrier earned $42.4 million, or 5 cents per share, for the quarter ended Dec. 31, down from $63.5 million, or 8 cents per share, for the same period in 2001. Analysts surveyed by Thomson First Call expected fourth-quarter earnings of 3 cents per share. Revenue was $1.4 billion, a 13 percent increase over $1.24 billion in the year-ago period. For all of 2002, Southwest earned $241 million or 30 cents per share, down 53 percent from $511.1 million or 63 cents per share in 2001. Revenue for the year dipped slightly to $5.52 billion, compared with $5.55 billion in 2001. Airlines have suffered financially since the Sept. 11, 2001, terror attacks on New York and Washington, which triggered a brief shutdown of the U.S. aviation system. ``In the context of what has been the worst year in commercial aviation history, we are very proud and grateful to report another profitable quarter and our 30th consecutive year of profitability,'' James F. Parker, Southwest chief executive and vice chairman, said in a statement. The only major U.S. carrier to remain profitable every quarter since the terror attacks, Southwest had warned in November that its streak of 46 straight profitable quarters would likely continue, but that it would be tough. ``Based on the weak 2002 revenue environment and current booking tendencies, we expect this post-September 11 revenue trend to continue through first quarter 2003,'' Parker said Wednesday. ``And, given the added threat of war with Iraq, it is simply impossible to predict first quarter 2003 unit revenues.'' ------ On the Net: AMR site: http://www.amrcorp.com Southwest site: http://www.iflyswa.com/investor--relations/fs--news--releases.html596928n http://www.nytimes.com/aponline/business/AP-Earns-Airlines.html?ex=1044247684&ei=1&en=9792c9a309a18ee2 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 onlinesales@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 2002 The New York Times Company