July 19--American Airlines parent company AMR Corp. landed a $220 million profit in the second quarter, slashing expenses as the carrier nears the end of bankruptcy.
The improved financial results came as American slashed employee costs through its bankruptcy process and created a leaner airline with fewer routes and fuller planes. While revenues were down slightly, the airline's profit compared with a $241 million loss during the same period in 2012.
"Through the enormous efforts of people throughout our company, the financial trajectory of AMR has improved dramatically and this positive impact can be seen across our business," said Bello Goren, chief financial officer of AMR, in a statement.
American Airlines has about 6,500 employes in Tulsa, most of them at the Maintenance & Engineering Center, the company's primary aircraft overhaul facility.
The quarterly profit is only the second for the company since it filed bankruptcy in November 2011, the last coming in the fourth quarter of 2012. But that previous profit of $262 million was heavily distorted by a favorable tax situation from bankruptcy.
But between April and June of this year, AMR increased passenger revenue on its main airline by $55 million, cut expenses by $350 million and put more bodies in seats.
The company's operating profit was $489 million, compared to just $142 million a year ago.
The earnings figures are a good sign for US Airways, the merger partner for American Airlines. Company officials expect the deal to close before the end of September, but it's awaiting the end of American's bankruptcy case and approval from federal anti-trust regulators.
American Airlines' debt holders are voting now on whether to approve the company's plan of reorganization, and the court has scheduled a confirmation hearing Aug. 15.
American's second-quarter revenues of $6.449 million were down by about $3 million from last year. The second-quarter profit is the company's first for that particular period since 2007.
American's $350 million reduction in expenses came primarily from cuts to employee costs, cheaper fuel and lower reorganization costs.
American Airlines cut 6,102 employees between May 2012 and May 2013. And the company has worked hard to trim pensions and benefits during the bankruptcy process.
AMR also spent $124 million on its bankruptcy in the second quarter. Its parent company spent $230 million in the second quarter of 2012, when American was in the thick of reorganization and lawyer fees.
AMR Corp. earnings
2013 2012 2013 2012
2Q 2Q Half-year Half-year
Revenue $6.4 billion $6.4 billion $12.5 billion $12.5 billion
Net income (loss) $220 million ($241 million) ($122 million) ($1.9 billion)
Net per share $0.59 ($0.72) ($0.36) ($5.67)
Kyle Arnold 918-581-8380
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