AMR Posts $43 Million First Quarter Loss as Economy Weakens

Apr 18, 2001, 01:00 ET from AMR Corp.

    FORT WORTH, Texas, April 18 /PRNewswire/ -- Feeling the effects of a
 slowing U.S. economy, AMR Corp. (NYSE:   AMR), the parent company of American
 Airlines, Inc., today reported a first quarter net loss of $43 million, or a
 $0.28 loss per share.  This compares with net earnings of $89 million, or
 $0.57 per share diluted, from continuing operations recorded in the first
 quarter of 2000.
     "Without a doubt, the weakening U.S. economy caused a reduction in
 business travel that affected our performance in the first quarter," said Don
 Carty, AMR's chairman and chief executive officer.  "Bad weather also played a
 role, forcing the cancellation of hundreds of flights, which diminished both
 capacity and traffic.  Fuel prices also remained stubbornly high, however, we
 continued to offset some of those costs through our fuel hedging program."
     Carty noted that the company's international system produced stronger
 first quarter revenue results than its domestic system.  "While our domestic
 revenue performance reflects a sluggish U.S. economy, in the first quarter we
 did not see a similar weakening in our international revenue performance,"
 Carty said.
     Carty also noted that the first quarter is typically the weakest for
 airlines.  "Historically, first quarter earnings tend to be relatively modest
 due to lower demand," Carty said.  "But there are many factors that will work
 in our favor as the year unfolds, the main one being our recent acquisition of
 TWA.  That transaction positions us as the leading U.S. carrier with a
 stronger route network and a fleet that is second to none."
     With the TWA acquisition accomplished, the company is now looking
 carefully at every opportunity to drive revenue and cost synergies.  "We have
 a golden opportunity to scrutinize every aspect of how we do business, from
 scheduling and selling to staffing and cost control, and ensure that we are
 spending wisely," Carty said.
     AMR posted first quarter operating revenues of $4.8 billion, including
 $176 million from its cargo division and $354 million from American Eagle, its
 regional affiliate.  American Eagle now operates 90 regional jets -- one third
 of the regional carrier's fleet -- with more RJs being delivered every month.
     In recent weeks, American continued to strengthen its international
 network by adding new service between San Jose, Calif., and both Taipei and
 Paris, and it is now converting its three-class international fleet to the
 customer-friendly "More Room Throughout Coach" seating configuration --
 something that no other airline offers.
     During the first quarter, American also extended the "More Room" concept
 from seats to overhead bins and is now installing larger bins on its
 narrowbody fleet, a project that will be complete later this year.
     American announced a number of initiatives during the first quarter that
 demonstrate the airline's continued industry leadership, including the
 SKYCAARE program, which provides skilled medical companions for travelers who
 are stable enough to travel but may need limited in-flight medical care or
 assistance.  During the first quarter, American also became the first airline
 in North America to introduce connecting gate information displays on cabin
 video monitors during flight.
     Statements in this news release contain forward-looking statements within
 the meaning of Section 27A of the Securities Act of 1933, as amended, and
 Section 21E of the Securities Act of 1934, as amended, which represent the
 Company's expectations or beliefs concerning future events.  When used in this
 release, the word "expects" and similar expressions are intended to identify
 forward-looking statements.  All forward-looking statements in this release
 are based upon information available to the Company on the date of this
 release.  The company undertakes no obligation to publicly update or revise
 any forward-looking statements, whether as a result of new information, future
 events or otherwise.  Forward-looking statements are subject to a number of
 factors that could cause actual results to differ materially from our
 expectations.  Additional information concerning these and other factors is
 contained in the Company's Securities and Exchange Commission filings,
 including but not limited to the Form 10-K for the year ended Dec. 31, 2000.
      Detailed financial information follows.
 
 
                                AMR CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in millions, except per share amounts)
                                  (Unaudited)
 
                                     Three Months Ended March 31,  Percent
                                          2001        2000          Change
     Revenues
        Passenger - American Airlines $  3,935    $  3,774           4.3
                  - AMR Eagle              354         338           4.7
        Cargo                              176         167           5.4
        Other revenues                     295         298          (1.0)
          Total operating revenues       4,760       4,577           4.0
 
     Expenses
       Wages, salaries and benefits      1,746       1,617           8.0
       Aircraft fuel                       686         553          24.1
       Depreciation and amortization       313         288           8.7
       Maintenance, materials and
        repairs                            280         271           3.3
       Other rentals and landing fees      257         237           8.4
       Commissions to agents               224         257         (12.8)
       Food service                        184         185          (0.5)
       Aircraft rentals                    148         153          (3.3)
       Other operating expenses            905         804          12.6
           Total operating expenses      4,743       4,365           8.7
 
     Operating Income                       17         212         (92.0)
 
     Other Income (Expense)
       Interest income                      40          32          25.0
       Interest expense                   (119)       (119)          ---
       Interest capitalized                 41          38           7.9
       SFAS 133 adjustments                (21)        ---           ---
       Miscellaneous - net                 (15)         (6)            *
                                           (74)        (55)         34.5
     Income (Loss) From Continuing
      Operations Before Income Taxes       (57)        157             *
     Income tax provision (benefit)        (14)         68             *
     Income (Loss) From Continuing
      Operations                           (43)         89             *
     Income From Discontinued Operations
      (net of applicable income taxes
      and minority interest)               ---          43           ---
     Net Earnings (Loss)              $    (43)   $    132             *
 
 
                                AMR CORPORATION
                 CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
                      (in millions, except per share amounts)
                                    (Unaudited)
 
                                    Three Months Ended March 31,
                                          2001       2000
     Earnings Per Share
       Basic
         Income (Loss) from
          Continuing Operations       $  (0.28)   $   0.60
         Discontinued Operations           ---        0.29
         Net Earnings (Loss)          $  (0.28)   $   0.89
 
       Diluted
         Income (Loss) from
          Continuing Operations       $  (0.28)   $   0.57
         Discontinued Operations           ---        0.29
         Net Earnings (Loss)          $  (0.28)   $   0.86
 
     Number of Shares Used in
      Computation
       Basic                               154         149
       Diluted                             154         154
 
     *  Greater than 100%
 
     Note:  Certain amounts from 2000 have been reclassified to conform with
            2001 presentation.
 
 
                                  AMR CORPORATION
                                OPERATING STATISTICS
                                    (Unaudited)
 
                                   Three Months Ended March 31,   Percent
                                         2001         2000         Change
     American Airlines
         Revenue passenger miles
          (millions)                    26,452       27,022        (2.1)
         Available seat miles
          (millions)                    38,977       40,020        (2.6)
         Cargo ton miles (millions)        549          546         0.5
         Passenger load factor            67.9%        67.5%        0.4 pts.
         Breakeven load factor            67.7%        63.7%        4.0 pts.
         Passenger revenue yield per
          passenger mile (cents)         14.88        13.95         6.7
         Passenger revenue per
          available seat mile (cents)    10.10         9.42         7.2
         Cargo revenue yield per ton
          mile (cents)                   31.68        30.32         4.5
         Operating expenses per
          available seat mile (cents)    11.21        10.04        11.7
         Fuel consumption
          (gallons, in millions)           743          730         1.8
         Fuel price per gallon (cents)    87.6         72.1        21.5
         Fuel price per gallon,
          excluding fuel taxes (cents)    82.0         66.6        23.1
         Operating aircraft at
          period-end                       719          703         2.3
 
     AMR Eagle
         Revenue passenger miles
          (millions)                       860          861        (0.1)
         Available seat miles
          (millions)                     1,588        1,514         4.9
         Passenger load factor            54.2%        56.9%       (2.7) pts.
         Operating aircraft at
          period-end                       267          271        (1.5)
 
     AMR Corporation
     Average Equivalent
      Number of Employees
             American Airlines          95,900       91,500
             Other                      13,000       13,000
                Total                  108,900      104,500
 
     Note:  Certain amounts from 2000 have been reclassified to conform with
            2001 presentation.
 
 

SOURCE AMR Corp.
    FORT WORTH, Texas, April 18 /PRNewswire/ -- Feeling the effects of a
 slowing U.S. economy, AMR Corp. (NYSE:   AMR), the parent company of American
 Airlines, Inc., today reported a first quarter net loss of $43 million, or a
 $0.28 loss per share.  This compares with net earnings of $89 million, or
 $0.57 per share diluted, from continuing operations recorded in the first
 quarter of 2000.
     "Without a doubt, the weakening U.S. economy caused a reduction in
 business travel that affected our performance in the first quarter," said Don
 Carty, AMR's chairman and chief executive officer.  "Bad weather also played a
 role, forcing the cancellation of hundreds of flights, which diminished both
 capacity and traffic.  Fuel prices also remained stubbornly high, however, we
 continued to offset some of those costs through our fuel hedging program."
     Carty noted that the company's international system produced stronger
 first quarter revenue results than its domestic system.  "While our domestic
 revenue performance reflects a sluggish U.S. economy, in the first quarter we
 did not see a similar weakening in our international revenue performance,"
 Carty said.
     Carty also noted that the first quarter is typically the weakest for
 airlines.  "Historically, first quarter earnings tend to be relatively modest
 due to lower demand," Carty said.  "But there are many factors that will work
 in our favor as the year unfolds, the main one being our recent acquisition of
 TWA.  That transaction positions us as the leading U.S. carrier with a
 stronger route network and a fleet that is second to none."
     With the TWA acquisition accomplished, the company is now looking
 carefully at every opportunity to drive revenue and cost synergies.  "We have
 a golden opportunity to scrutinize every aspect of how we do business, from
 scheduling and selling to staffing and cost control, and ensure that we are
 spending wisely," Carty said.
     AMR posted first quarter operating revenues of $4.8 billion, including
 $176 million from its cargo division and $354 million from American Eagle, its
 regional affiliate.  American Eagle now operates 90 regional jets -- one third
 of the regional carrier's fleet -- with more RJs being delivered every month.
     In recent weeks, American continued to strengthen its international
 network by adding new service between San Jose, Calif., and both Taipei and
 Paris, and it is now converting its three-class international fleet to the
 customer-friendly "More Room Throughout Coach" seating configuration --
 something that no other airline offers.
     During the first quarter, American also extended the "More Room" concept
 from seats to overhead bins and is now installing larger bins on its
 narrowbody fleet, a project that will be complete later this year.
     American announced a number of initiatives during the first quarter that
 demonstrate the airline's continued industry leadership, including the
 SKYCAARE program, which provides skilled medical companions for travelers who
 are stable enough to travel but may need limited in-flight medical care or
 assistance.  During the first quarter, American also became the first airline
 in North America to introduce connecting gate information displays on cabin
 video monitors during flight.
     Statements in this news release contain forward-looking statements within
 the meaning of Section 27A of the Securities Act of 1933, as amended, and
 Section 21E of the Securities Act of 1934, as amended, which represent the
 Company's expectations or beliefs concerning future events.  When used in this
 release, the word "expects" and similar expressions are intended to identify
 forward-looking statements.  All forward-looking statements in this release
 are based upon information available to the Company on the date of this
 release.  The company undertakes no obligation to publicly update or revise
 any forward-looking statements, whether as a result of new information, future
 events or otherwise.  Forward-looking statements are subject to a number of
 factors that could cause actual results to differ materially from our
 expectations.  Additional information concerning these and other factors is
 contained in the Company's Securities and Exchange Commission filings,
 including but not limited to the Form 10-K for the year ended Dec. 31, 2000.
      Detailed financial information follows.
 
 
                                AMR CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in millions, except per share amounts)
                                  (Unaudited)
 
                                     Three Months Ended March 31,  Percent
                                          2001        2000          Change
     Revenues
        Passenger - American Airlines $  3,935    $  3,774           4.3
                  - AMR Eagle              354         338           4.7
        Cargo                              176         167           5.4
        Other revenues                     295         298          (1.0)
          Total operating revenues       4,760       4,577           4.0
 
     Expenses
       Wages, salaries and benefits      1,746       1,617           8.0
       Aircraft fuel                       686         553          24.1
       Depreciation and amortization       313         288           8.7
       Maintenance, materials and
        repairs                            280         271           3.3
       Other rentals and landing fees      257         237           8.4
       Commissions to agents               224         257         (12.8)
       Food service                        184         185          (0.5)
       Aircraft rentals                    148         153          (3.3)
       Other operating expenses            905         804          12.6
           Total operating expenses      4,743       4,365           8.7
 
     Operating Income                       17         212         (92.0)
 
     Other Income (Expense)
       Interest income                      40          32          25.0
       Interest expense                   (119)       (119)          ---
       Interest capitalized                 41          38           7.9
       SFAS 133 adjustments                (21)        ---           ---
       Miscellaneous - net                 (15)         (6)            *
                                           (74)        (55)         34.5
     Income (Loss) From Continuing
      Operations Before Income Taxes       (57)        157             *
     Income tax provision (benefit)        (14)         68             *
     Income (Loss) From Continuing
      Operations                           (43)         89             *
     Income From Discontinued Operations
      (net of applicable income taxes
      and minority interest)               ---          43           ---
     Net Earnings (Loss)              $    (43)   $    132             *
 
 
                                AMR CORPORATION
                 CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
                      (in millions, except per share amounts)
                                    (Unaudited)
 
                                    Three Months Ended March 31,
                                          2001       2000
     Earnings Per Share
       Basic
         Income (Loss) from
          Continuing Operations       $  (0.28)   $   0.60
         Discontinued Operations           ---        0.29
         Net Earnings (Loss)          $  (0.28)   $   0.89
 
       Diluted
         Income (Loss) from
          Continuing Operations       $  (0.28)   $   0.57
         Discontinued Operations           ---        0.29
         Net Earnings (Loss)          $  (0.28)   $   0.86
 
     Number of Shares Used in
      Computation
       Basic                               154         149
       Diluted                             154         154
 
     *  Greater than 100%
 
     Note:  Certain amounts from 2000 have been reclassified to conform with
            2001 presentation.
 
 
                                  AMR CORPORATION
                                OPERATING STATISTICS
                                    (Unaudited)
 
                                   Three Months Ended March 31,   Percent
                                         2001         2000         Change
     American Airlines
         Revenue passenger miles
          (millions)                    26,452       27,022        (2.1)
         Available seat miles
          (millions)                    38,977       40,020        (2.6)
         Cargo ton miles (millions)        549          546         0.5
         Passenger load factor            67.9%        67.5%        0.4 pts.
         Breakeven load factor            67.7%        63.7%        4.0 pts.
         Passenger revenue yield per
          passenger mile (cents)         14.88        13.95         6.7
         Passenger revenue per
          available seat mile (cents)    10.10         9.42         7.2
         Cargo revenue yield per ton
          mile (cents)                   31.68        30.32         4.5
         Operating expenses per
          available seat mile (cents)    11.21        10.04        11.7
         Fuel consumption
          (gallons, in millions)           743          730         1.8
         Fuel price per gallon (cents)    87.6         72.1        21.5
         Fuel price per gallon,
          excluding fuel taxes (cents)    82.0         66.6        23.1
         Operating aircraft at
          period-end                       719          703         2.3
 
     AMR Eagle
         Revenue passenger miles
          (millions)                       860          861        (0.1)
         Available seat miles
          (millions)                     1,588        1,514         4.9
         Passenger load factor            54.2%        56.9%       (2.7) pts.
         Operating aircraft at
          period-end                       267          271        (1.5)
 
     AMR Corporation
     Average Equivalent
      Number of Employees
             American Airlines          95,900       91,500
             Other                      13,000       13,000
                Total                  108,900      104,500
 
     Note:  Certain amounts from 2000 have been reclassified to conform with
            2001 presentation.
 
 SOURCE  AMR Corp.