American Reports $375 Million First Quarter Loss

AMR reported a first-quarter net loss of $375 million, of $1.35 per share, blaming an economic downturn unseen in decades that put a damper on passenger demand and revenue. The results include the impact of a $13 million charge, or $0.05 per share, to reflect the net present value of future lease payments related to A300 aircraft retirements during the quarter.

For several years, AMR has advocated for discipline on adding capacity, or available seat miles, as it seeks a more sustainable supply-demand balance in the market. Mainline capacity declined 8 percent in the first quarter compared to the first quarter last year, as the company further exercised discipline, given economic conditions and the challenging demand environment. AMR expects mainline capacity to decrease by about 6.5 percent in 2009 versus 2008, with about a 9 percent reduction of domestic capacity and international reduction of about 2.5 percent.

AMR reported first-quarter consolidated revenues of approximately $4.8 billion, a decrease of 15 percent year over year, largely driven by reduced capacity and economic factors, including less passenger traffic and lower fares, as well as lower cargo demand.

Other revenues, including sales from such sources as confirmed flight changes, purchased upgrades, buy-on-board food services, and bag fees, increased 6.9 percent year over year to $558 million in the first quarter, compared to the first quarter of 2008.

American’s mainline passenger revenue per available seat mile (unit revenue) declined by 8.7 percent in the first quarter compared to the year-ago quarter. Mainline capacity, or total available seat miles, in the first quarter decreased by 8 percent compared to the same period in 2008, as the company continued to exercise capacity discipline given the difficult demand environment.