AMR posts 'dreadful' $1 billion first-quarter loss DALLAS/CHICAGO (Reuters) =97 AMR Corp., the parent of American Airlines,=20 Wednesday posted a quarterly loss of $1.04 billion as the world's largest=20 carrier battles to slash costs and stay out of bankruptcy court. "Our=20 first-quarter results were truly dreadful," said AMR Chairman and Chief=20 Executive Don Carty, whose future at the company is unclear after a=20 public-relations disaster involving the disclosure of executive perks soon= =20 after labor unions had agreed to concessions to keep the company afloat. A= =20 source familiar with the matter said American's loss had been anticipated=20 at around $800 million or $900 million for the quarter, so the $1 billion=20 was clearly staggering. The Fort Worth, Texas-based airline canceled its=20 regular conference call with Chief Financial Officer Jeff Campbell, citing= =20 its "fluid" situation. AMR's board meets Thursday. Financial sources close= =20 to the the situation said lawyers are reworking paperwork yet again for a=20 potential bankruptcy filing after the board meets. One banking source said:= =20 "The company's financial condition is not great," adding daily cash burn=20 could be approaching the $10 million per day rate, rather than the $5=20 million outlined at the end of the fourth quarter. Other banking sources=20 familiar with American's situation said at least several board members are= =20 very unhappy with the way Carty disclosed special funding of pension trusts= =20 for 45 executives only after unions had voted on big concession packages.=20 But Carty was also said to have a number of strong supporters among the=20 board, leaving his future unclear. A report in The Dallas Morning News=20 Wednesday cited a source close to the company and the board of directors as= =20 saying AMR's board was considering replacing Carty. An AMR spokesman said=20 the company does not comment on rumors. Talk of an interim replacement=20 centers mostly around Gerard Arpey, president and chief operating officer.= =20 Also mentioned as a possible candidate is former CEO Robert Crandall, a=20 no-nonsense outspoken executive who has long criticized high costs in the=20 airline industry. Shares rise, despot gloom The airline said a drop in travel demand due to global uncertainties such=20 as the war in Iraq, high fuel prices and low-fare levels hurt its bottom=20 line for the quarter. Despite the chaos, AMR shares were up 9.3% at $3.75=20 on the New York Stock Exchange Wednesday afternoon. The shares had fallen=20 about 40% over the last week and were up Wednesday amid broad strength in=20 airline stocks. Fort Worth, Texas-based AMR posted a first-quarter loss of= =20 $6.68 per share, compared with a loss of $10.09 per share in the first=20 quarter of 2002, which included a cumulative effect of an accounting change= =20 of $988 million, or $6.38 per share. The airline posted a loss of $3.53 a=20 share excluding special items in the first quarter of 2002. Analysts=20 expected AMR to show a loss of $6.08 per share, with estimates ranging from= =20 a loss of $5.18 to $7.00 per share, according to Thomson First Call. "It's= =20 clearly a disappointment even relative to pretty somber expectations," said= =20 Gary Chase, analyst at Lehman Brothers, referring to the billion-dollar=20 loss. In the year-ago quarter, AMR posted a loss of $1.56 billion, which=20 included the effect of the accounting change. AMR said revenue for the=20 quarter was $4.12 billion, down by about 1% from $4.16 billion in the=20 year-ago quarter. "Liquidity is constrained. Unrestricted cash is believed= =20 to have fallen substantially from $1.9 billion at Dec. 31, 2002," aid=20 ratings agency Standard & Poor's. AMR lost an industry-record $3.5 billion= =20 in 2002 and has said for months its losses were unsustainable. The carrier= =20 narrowly avoided bankruptcy last week when unions approved concession deals= =20 aimed at saving American $1.8 billion a year in labor costs. Those deals=20 were soon in jeopardy, however, as union officials seethed that American=20 failed to disclose special pension funding and bonuses for executives. Two= =20 of the unions have said they will vote again on the concessions, while the= =20 third said it may not certify its vote. American has said it would file for= =20 Chapter 11 protection if any one of the unions voted against the cuts. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.pscutt.com TnT Webdirectory: http://search.co.tt *********************************************************