WASHINGTON (AP) -- Two of the biggest U.S. airlines reported second-quarter profits on Wednesday, benefiting from increased passenger demand and reduced labor expenses that helped offset soaring fuel costs.
AMR Corp., the parent of American Airlines, earned $58 million in the April-June period, while Continental Airlines Inc. posted a $100 million profit. Both carriers' results exceeded analysts' expectations.
AMR's profit was equivalent to 30 cents per share, a significant improvement from last year's net income of 3 cents per share, or $6 million. It beat the 15-cent-per-share estimate of analysts surveyed by Thomson Financial and was the company's first net profit that did not include special items since the fourth quarter of 2000.
Second-quarter revenue at the Fort Worth, Texas-based airline rose 10 percent to $5.31 billion, compared with $4.83 billion a year earlier.
Passenger traffic grew by 7.4 percent, ahead of seat capacity which increased by 2.3 percent. It's planes were 79.5 percent full for the quarter, compared with 75.7 percent a year ago.
AMR chief executive Gerard Arpey credited the company's success to the hard work of its employees and said that workers will have to become even more efficient in order for the company to prosper in the face of sky-high fuel prices. The company's fuel costs climbed 47.2 percent to $1.35 billion in the quarter.
''Unfortunately, there doesn't seem to be any relief in sight - oil prices in the second half of the year are currently projected to be higher than during the second quarter,'' Arpey said in a statement. ''As a result, we have no choice but to redouble our efforts to wring cost and inefficiency out of everything we do.''
The high cost of fuel is an industrywide problem.
The price of jet fuel is up 58 percent from a year ago at about $1.75 per gallon on the New York spot market, according to government statistics. In 2000, the last full year in which the U.S. airline industry was profitable, jet fuel costs averaged 78.6 cents per gallon, according to the Air Transport Association, an industry trade group.
Continental Airlines' net income equaled $1.26 per share, reversing a year ago loss of $28 million, or 43 cents per share. Excluding a gain from the contribution of ExpressJet Holdings Inc. shares to its pension plan, Continental said its adjusted income was $53 million, or 69 cents per share, in the latest quarter.
The company's adjusted profit was well ahead of the average estimate of 20 cents per share from analysts surveyed by Thomson Financial.
Quarterly revenue totaled $2.86 billion, a gain of 12 percent from $2.55 billion a year earlier.
Continental said its traffic grew 7.2 percent and that capacity increased 4.2 percent. It's planes were 80.4 percent full for the quarter, compared with 78.1 percent a year ago.
Fuel costs swelled 45 percent to $1.05 billion, the company said.
Continental shares moved up 17 cents to $15.87 in midday trading. Shares of AMR fell 1 cent to $14.22.
Increased passenger demand and reduced labor expenses help offset soaring fuel costs.
Net income totaled $100 million, or $1.26 per share, compared with a loss of $28 million, or 43 cents per share, a year ago.
The parent of American Airlines, the nation's largest carrier, reported the loss despite a 15 percent rise in revenue, as it was hit by rising jet fuel prices and tough competition from low-cost...