Texas-based air carrier AMR Corp. (AMR) Monday said its principal subsidiary American Airlines reported a 3.5% drop in July traffic as its major operating sectors carried less passengers during the period resulting in a 2 percentage points decline in load factor. AMR's operating subsidiary, American Eagle reported a 9.1% decline in July traffic and a 6.5 points drop in load factor.
U.S airline industry, which was severely hit by the recent surge in fuel price, is yet to regain strength from the current drop in gasoline prices.
Total traffic for the month, measured as Revenue Passenger Miles or RPM decreased 3.5% to 12.46 billion from 12.91 billion in the comparable month last year. Monthly domestic and international traffic declined 5.3% and 0.2%, respectively. Traffic for the Atlantic sector dropped 3.7% to 1.89 billion RPM, while Latin American traffic rose 2.7% to 2.21 billion RPM. Traffic for the Pacific region was 485.73 million RPM, down from 482.16 million RPM in the corresponding period of 2007.
Total load factor for the month declined to 85.8% form 87.9% form last year. Domestic load factor for July dropped 2.1 points to 87.3% and international load factor decreased 1.8 points to 83.4%. Atlantic sector load factor dropped 2 points and Latin American load factor declined 1.5 points from July 2007. July load factor for the pacific region fell 2.7 points to 83.8%.
Total capacity or Available Seat Miles or ASM for the month decreased to 14.52 billion from 14.70 billion a year earlier. Domestic capacity dropped 3%, while international capacity increased 2% to 5.50 billion ASM from July 2007. Capacity in the Atlantic sector declined 1.4%, while Latin American capacity rose 4.6% to 2.65 billion ASM. Capacity in the Pacific advanced 4% to 579.76 million ASM.
Total load factor for the year-to-date period declined to 81.6% from 81.9% last year and traffic fell 2.2% to 79.34 billion RPM. Year-to-date capacity decreased 1.8% to 97.28 billion ASM from 99.02 billion ASM in the same period last year.
American Eagle's total traffic for the month decreased 9.1% to 761.73 million RPM from the similar period last year. American Eagle Airlines traffic for the month dropped 9.2% to 711.13 million RPM, while Executive Airlines traffic fell 7.6% to 50.60 million RPM from the corresponding month last year.
American Eagle recorded total July system load factor of 73.1%, down 6.5 points from 79.6% in July last year. Load factor of American Eagle Airlines for the month declined 6.7 points to 73.9% and Executive Airlines load factor fell 4.8 points to 63.5% from last year.
Total July capacity of American Eagle declined to 1.04 billion ASM from 1.05 billion ASM last year. American Eagle Airlines capacity dropped 0.9% to 962.67 million ASM and Executive Airlines capacity decreased 0.6% to 79.69 million ASM.
Year-to-date load factor of American Eagle dropped 2.6 points to 71.4% from the year-ago period. Total traffic and capacity for the period declined 7.5% and 4.1%, respectively.
On July 25 Standard & Poor's lowered its ratings on AMR and American Airlines, expecting heavy losses and negative operating cash flow due to record high fuel prices. The rating agency lowered long-term corporate credit ratings on both the entities to 'B- 'from 'B' and removed the ratings from CreditWatch, where they had been placed with negative implications on May 22. The agency, however, affirmed the 'B-3' short-term rating on AMR.
Earlier in July, AMR reported a net loss for the second quarter, hurt by soaring fuel prices. Net loss totaled $5.77 per share compared to a profit last year, while revenues increase 5.1% to $6.18 billion. The company had earlier announced plans to tackle the rising fuel costs by reducing capacity through fleet retirements.
AMR closed Monday's regular trading at $9.69, up $0.79 or 8.88%, on a volume of about 26.26 million shares. The Stock has been trading in a range of $4.00 to $26.00 for the past twelve months, with a three-month average volume of about 21.92 million shares.
For comments and feedback: editorial@rttnews.com