American Airlines parent AMR on Wednesday reported a third-quarter net loss of USD$238 million on worker severance and Chapter 11 costs.The latest results were up from the from the USD$162 million reported a year ago and included USD$348 million in severance and reorganisation costs. Revenue rose 0.8 percent to USD$6.43 billion. Operating expenses were up 0.6 percent, but fuel costs fell 3.3 percent.Unit revenue, a key measure of pricing power, rose 4.3 percent from a year earlier at American and regional affiliates. The percentage of seats filled reached 84.7 percent, a record for the quarter.The company, which filed for Chapter 11 bankruptcy protection last November and is evaluating a potential merger with rival US Airways, cited progress in reducing costs."American has been very careful about how many of the least expensive seats they are selling and it looks like they've been seeing some good demand for business-class and first-class tickets especially on international flying," said Henry Harteveldt, co-founder and airline analyst with Atmosphere Research Group.Harteveldt said American likely benefited from problems United Continental had this year when it converted to a new reservation system. United has conceded the process hurt customer service and said issues are being resolved.Quarterly revenue at AMR rose nearly 1 percent despite well-publicised September flight cancellations and delays that American blamed on a slowdown by pilots. The company said the disruptions were not material to third-quarter results."The revenue gains... show that American is on the right track in a difficult economic environment," said Maxim Group aerospace analyst Ray Neidl.Still, he said, American had room for improvement, particularly in terms of operating margin. AMR reported quarterly operating margin of 4.1 percent. Neidl said he expects 9 percent at Delta and 7.4 percent at US Airways.Business agreements with British Airways and Iberia in the Atlantic region and Japan Airlines in the Pacific brought American more higher-paying business customers in the quarter."We have really been able to leverage these agreements to increase our yields by taking advantage of the distribution and selling and marketing power of our partners on the other side of the ocean," said Virasb Vahidi, chief commercial officer of American Airlines.American, the third-biggest US air carrier, has grappled with operational problems of late. In addition to the September flight cancellations, incidents in which seats came unbolted from the floor on some aircraft in recent weeks raised safety concerns.The carrier, which is currently in contract negotiations with the Allied Pilots Association union, is continuing to cancel flights until the middle of November as it looks to get operations back to normal.The pilots union has said it called no work slowdown against the airline. It has taken a strike vote among its members but has not yet disclosed the results.Separately, American said on Wednesday it plans to hire more than 1,500 flight attendants over the next year. It cited a big response to a recent voluntary programme in which more than 2,250 flight attendants opted to leave the company. Source: Reuters
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