Arpey added, "In spite of these very challenging times, we continue to see improvements in our dependability and customer experience metrics, thanks in large part to the hard work and commitment of our employees."
Financial and Operational Performance (Excluding Impact of Special Items)
AMR reported second quarter consolidated revenues of approximately $4.9 billion, a decrease of nearly 21 percent year over year, largely driven by reduced capacity and the reduced demand for air travel and cargo resulting from the global economic downturn. In addition, the Company estimates that the impact of the H1N1 virus reduced second quarter revenue by approximately $50 million to $80 million.
Other revenues, from sources such as confirmed flight changes, purchased upgrades, Buy-on-Board food services, and baggage service charges, increased 7.4 percent to $565 million in the second quarter, compared to the second quarter of 2008. Reflecting global economic weakness, the Company's cargo revenue declined by approximately $99 million or 42.6 percent in the second quarter compared to the same period in 2008.
American's mainline passenger revenue per available seat mile (unit revenue) declined by 16 percent in the second quarter compared to the year-ago quarter.
Mainline capacity, or total available seat miles, in the second quarter decreased by 7.6 percent compared to the same period in 2008, as the Company continued to exercise capacity discipline given the difficult demand environment.
American's mainline load factor - or the percentage of total seats filled - was 81.8 percent during the second quarter, compared to 82.5 percent in the second quarter of 2008. American's second quarter yield, which represents average fares paid, decreased by 15.4 percent compared to the second quarter of 2008. The decrease in yield was largely due to more-aggressive pricing industrywide and reduced traffic in the premium cabins.
American's mainline cost per available seat mile (unit cost) in the second quarter decreased by 12.8 percent year over year, largely due to lower fuel prices. Taking into account the impact of fuel hedging, AMR paid $1.90 per gallon for jet fuel in the second quarter versus $3.19 a gallon in the second quarter of 2008, a 41 percent decrease. As a result, the Company paid $910 million less for fuel in the second quarter of 2009 than it would have paid at prevailing prices from the prior-year period.
Excluding fuel, mainline unit costs in the second quarter of 2009 increased by 5 percent year over year, driven by costs related to reduced capacity, pension expenses, and investments in dependability initiatives.
Balance Sheet Update
Including the proceeds from the sale-leaseback transaction of approximately $66 million, AMR ended the second quarter with $3.3 billion in cash and short-term investments, including a restricted balance of $460 million. That compares to a balance of $5.5 billion in cash and short-term investments, including a restricted balance of $434 million and more than $800 million in collateral from hedge counterparties that was held by the Company, in the second quarter of 2008. The Company's second quarter 2009 cash balance includes the impact of approximately $400 million in long-term debt and capital lease payments during the quarter - and approximately $1.2 billion during the first half of the year - out of approximately $2 billion in total expected long-term debt maturities and capital lease payments in 2009.
AMR's Total Debt, which it defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, was $14.2 billion at the end of the second quarter of 2009, compared to $15.2 billion at the end of the second quarter of 2008. AMR's Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, was $11.4 billion at the end of the second quarter of 2009, compared to $10.1 billion at the end of the second quarter of 2008.
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