AMR Corp. (AMR), parent of American Airlines, Inc., said Wednesday that its second quarter loss narrowed from last year, as revenue surged on higher fares and offset a significant rise in fuel costs. However, the company's quarterly loss per share was worse than what analysts expected.
The Fort Worth, Texas-based company reported a net loss for the second quarter of $10.7 million or $0.03 per share, compared to a net loss of $390 million or $1.39 per share for the year-ago quarter.
Excluding non-recurring charges related to the sale of certain aircraft and the grounding of leased Airbus A300 aircraft prior to lease expiration, the year-ago quarter net loss was $319 million or $1.14 per share.
On average, 13 analysts polled by Thomson Reuters expected the company to report a loss of $0.01 per share for the second quarter.
Total operating expenses for the quarter increased 7% to $5.48 billion, as fuel costs jumped 24% to $1.66 billion.
Including the impact of fuel hedging, AMR said, it paid nearly $334 million more for jet fuel in the second quarter than it would have paid at prices prevailing during the second quarter of last year.
The company reported an operating income of $196 million for the second quarter, compared to an operating loss of $226 million in the prior year quarter.
Total operating revenues for the second quarter rose 16% to $5.67 billion from $4.89 billion in the same quarter last year. Nine analysts had a consensus revenue estimate of $5.69 billion for the second quarter.
"Though increased fuel prices added dramatically to our expenses this quarter, we made substantial progress improving our financial performance comparatively, both year-over-year and in sequential quarters," said AMR Chairman and CEO Gerard Arpey.
Consolidated passenger revenue per available seat mile or unit revenue for the second quarter grew 16.7% from a year earlier, driven by improving economic conditions.
Tight capacity control helped American Airlines grow its mainline load factor by 2.0 points to 83.9% in the second quarter.
Passenger yield, which represents the average fares paid, increased at American Airlines by 14% year over year in the second quarter.
AMR ended the quarter with about $5.5 billion in cash and short-term investments, up from $3.3 billion a year ago.
The company's total debt at the end of the second quarter was $16.1 billion, compared to $14.2 billion a year earlier.
During the quarter, American Airlines received approval from the U.S. Department of Transportation to operate daily, year-round scheduled service from New York's John F. Kennedy International Airport to Tokyo International Airport at Haneda. The airline will serve the route starting January 20, 2011.
American Airlines also launched its first flight between Chicago O'Hare International Airport and Beijing Capital International Airport on May 25.
American Airlines was awarded by the U.S. Department of Transportation rights to fly 11 new flights per week between the United States and Brazil beginning November 18.
Last month, AMR also reiterated its intent to evaluate the possible divestiture of American Eagle. In 2007, the company had mulled a potential divestiture of American Eagle, which it formed by welding together several regional carriers bought by the company. The divestiture at that time was indicated as a product of the pressure from the investor to enhance value by selling major assets.
For the first six months of the year, the company reported a net loss of $516 million or $1.55 per share, compared to a net loss of $765 million or $2.74 per share for the same period last year.
Total operating revenues for the first-half increased 10.4% to $10.74 billion from $9.73 billion in the prior year period.
AMR said it has hedged 44% of its anticipated third quarter fuel consumption and that it is planning for an average system price of $2.25 per gallon in the quarter. The company expects consolidated of jet fuel for the third quarter to be 715 million. AMR expects consolidated capacity in the third quarter to grow by 3.4%.
For the full year, the company has hedged 38% of its anticipated consumption and is planning for an average system price of $2.29 per gallon. AMR expects full year 2010 consolidated capacity to increase by 1.2%.
On Tuesday, American Airlines, British Airways (BAY.L), and Iberia received final approval from the U.S. Department of Transportation to create a joint business governing flights between North America and Europe. The European Union approved the joint business on July 14.
AMR said Wednesday it has promoted chief financial officer Thomas Horton to president, where he will oversee the finance, planning, sales and marketing, customer service and information technology organizations. Bella Goren, senior vice president - customer relationship marketing, will replace Horton as CFO.
Additionally, American Airlines said it has agreed to buy 35 more-fuel-efficient Boeing 737-800 jets to be delivered in 2011 and 2012. The newly ordered 737s will be in addition to the 84 new 737s that began entering the airlines' fleet in April last year, when its launched its replacement plan for its fuel-guzzling MD80s.
Among others in the industry, US Airways Group Inc. (LCC) on Wednesday reported a sharp jump in second quarter profit, driven mainly by higher passenger yields reflecting greater demand as the economy improved.
Delta Air Lines, Inc. (DAL) on Monday reported a swing to $467 million second quarter profit, reflecting strong revenue growth.
AMR Corp. shares are currently trading at $6.88, up 3 cents.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.