AMR Posts Third-Quarter Profit after Subsidiary Sale

AMR, parent company of American Airlines, announced a third-quarter profit despite a $1.1 billion increase in fuel expenses thanks to the sale of an investment subsidiary. The company recorded a $432 million gain from the sale of American Beacon Advisors.

The company also recorded $27 million in one-time severance and aircraft charges related to its fall 2008 capacity reduction. Going forward, the company expects remaining special charges of approximately $121 million for this event, primarily representing the present value of remaining lease payments on A300 aircraft at the time these aircraft are permanently retired, as previously announced by the company.

Excluding the special items, the company reported a loss of $360 million, or $1.39 per diluted share, in the third quarter. The current quarter results compare to a net profit of $175 million for the third quarter of 2007, or $0.61 per diluted share, which included the impact of a $40 million charge for additional salary and benefit expense accruals as previously disclosed.

American’s mainline passenger revenue per available seat mile (unit revenue) increased by 10.9 percent in the third quarter compared to the year-ago quarter. Mainline capacity, or total available seat miles, in the third quarter decreased by 3.0 percent compared to the same period in 2007, as the company continued to remove unprofitable flying from its schedule.

American’s mainline load factor –or the percentage of total seats filled- was 82.2 percent during the third quarter, compared to 83.9 percent in the third quarter of 2007. Third-quarter yield for the company, which represents average fares paid, increased 13.2 percent compared to the third quarter of 2007, its 14th consecutive quarter of year-over-year yield increases.

American also announced that it has entered into a purchase agreement with Boeing under which American intends to acquire an initial 42 Boeing 787-9 aircraft scheduled for delivery beginning in 2012 and ending in 2018, with the right to purchase up to 58 additional 787 aircraft that may be scheduled for delivery beginning in 2015 and ending in 2020. The purchase of the initial 42 787-9 aircraft is subject to certain contingency provisions.