This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx /-------------------- advertisement -----------------------\ FOR YOUR CONSIDERATION: IN AMERICA - IN THEATRES NOVEMBER 26 Fox Searchlight Pictures proudly presents IN AMERICA directed by Academy Award(R) Nominee Jim Sheridan (My Left Foot and In The Name of the Father). IN AMERICA stars Samantha Morton, Paddy Considine and Djimon Hounsou. For more info: http://www.foxsearchlight.com/inamerica \----------------------------------------------------------/ In a Sign of Stronger Finances, American Airlines Reports a Profit October 23, 2003 By EDWARD WONG The AMR Corporation, the parent company of American Airlines, reported a profit yesterday of $1 million in the third quarter, a sign of a weak recovery in the air travel industry. But company executives and analysts warned that a much slower business season is ahead. Seizing on the report of AMR's strengthened finances, leaders of the mechanics' union declared that American should stop further layoffs. AMR's $1 million in profit included special credits and charges. Excluding those, the company had a loss of $23 million in the quarter, or 15 cents a share. Analysts surveyed by Thomson First Call had forecast a loss of 41 cents a share. In the third quarter of 2002, AMR had a net loss of $924 million, or $5.93 a share. AMR also said its current figures showed an operating profit of $165 million, compared with an operating loss of $1.3 billion in the third quarter of 2002. Operating revenue totaled $4.6 billion, a 1.8 percent increase from a year ago. "I was definitely encouraged by the progress they're making," said Jim Corridore, an analyst at Standard & Poor's. "But clearly they're not out of the woods. They're entering into a seasonally weaker period." Shares of AMR fell $1.24 yesterday, to $13.66. Jeff Campbell, chief financial officer of AMR, said in a conference call with analysts that high fuel prices continued to hamper the airline. Those prices were 9 percent higher in this year's third quarter than they were in the comparable period last year, he said. The chief executive, Gerard J. Arpey, said that American was "clearly on the right track," but that "nevertheless, the third quarter is a peak season for the airline industry, and under normal circumstances, we should be doing much better than simply breaking even." AMR's cash balance was a bright spot in the earnings report. Mr. Campbell said AMR ended the quarter with $3.3 billion in cash, an improvement over the $2.4 billion it had at the end of the second quarter. The core of AMR's improvement came from the $4 billion in annual cost cuts that the company began putting into effect in May. Of that amount, $1.8 billion came from labor. American won significant concessions in the spring from all its workers, both unionized and not. In recent months, American had been considering closing at least one of three major maintenance centers, but said yesterday that it would keep all three open. That drew praise from the Transport Workers Union, which represents mechanics and other ground workers. But union leaders said that American should not lay off workers in St. Louis, a move Mr. Arpey announced in July, because the airline's finances were improving. Mr. Arpey had said that the airline was significantly scaling back its St. Louis operation, laying off 1,650 workers from the airport there and 540 workers from a reservations center in the city. The pared-down schedule at St. Louis - the old base hub of T.W.A., which American acquired in 2001 - is set to go into effect Nov. 1, and officials of the Transport Workers Union said yesterday that AMR should reconsider the layoffs planned for that day. "The workers in St. Louis made major sacrifices to keep the company out of bankruptcy and American must not turn its back on them now," Robert Gless, international representative for the union's air transport division, said yesterday in a conference call with reporters. A big threat to AMR's business model remains the growing presence of profitable low-cost airlines. Several analysts and reporters pressed Mr. Arpey on American's fare structure yesterday, because business travelers have been moving away from the high last-minute fares charged by traditional airlines. Mr. Arpey said that American was looking at all options, but that it had no immediate plans to significantly change its fare structure. http://www.nytimes.com/2003/10/23/business/23AIR.html?ex=1067913581&ei=1&en=6ff88d70fbbd1e0e --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! 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