Hurricanes Hurt American Airlines

Oct. 4, 2005
Hurricanes and high fuel prices are likely to mean poor financial results for American Airlines for the third quarter, despite three months of strong demand.

Hurricanes and high fuel prices are likely to mean poor financial results for American Airlines for the third quarter, despite three months of strong demand.

Executives of the Fort Worth-based airline warned Monday that quarterly results, which will be released later this month, will be grim.

"Despite improved traffic figures, the effects of Hurricanes Katrina and Rita, including soaring jet-fuel prices, have significantly hurt American's third-quarter results," airline executives said in a statement.

Jet-fuel prices have risen substantially since the hurricanes, as refinery capacity has slowed. In addition to a steep rise in the cost of crude oil, the added price of refining that oil into jet fuel has risen more than 400 percent over the past four years, according to the Air Transport Association.

The fuel prices have largely erased the gains that American and other airlines have made from heavy passenger demand in recent months. Last month, American posted a 9 percent jump in traffic, compared with September 2004.

Domestic passenger traffic was up 7 percent, while international traffic rose 12 percent. On average, airplanes flew about 76 percent full, an improvement of 3 percentage points.

American Eagle, the airline's regional affiliate, reported a 26 percent jump in traffic in September.

Analysts are predicting a loss of 51 cents per share, or about $80 million, for the quarter, according to a survey of analysts by First Call/Thompson Financial.

Shares of AMR Corp., American's parent (ticker: AMR) slipped 10 cents to close at $11.08 in trading Monday.

Fort Worth Star Telegram

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