AMR posts a 3Q operating profit of $110 million

Washington DC
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American Airlines and American Eagle parent AMR Corp posted a third quarter net profit of $110 million excluding special items, offering management some relief in an otherwise challenging three-month period.

With consolidated passenger yield rising 3.5% year over year and load factor achieving a record result of 85.5%, AMR was able to overcome bankruptcy-related strife involving a stand-off with pilots and an on-going take-over bid by US Airways.

"These results were driven by the best unit revenue growth in the industry in each month of the quarter, and by record load factor," says Tom Horton, AMR's chairman and chief executive.

Despite a wave of flight cancellations in September triggered by pilot-ordered maintenance actions, AMR says the net impact of the disruptions was "not material" to the quarterly results.

Overall, AMR's net lost including reorganization items and special charges amounted to $238 million the third quarter, a 40% increase in the loss compared to the same period in 2011. AMR filed for Chapter 11 bankruptcy protection in the fourth quarter last year.

Overall sales in the third quarter grew by 0.8% year-over-year to $6.43 billion, a slight advantage over a 0.6% increase to $6.38 billion. Aircraft fuel expense, which represents roughly one-third of all costs, declined by 3.3% to $2.18 billion.

Passenger revenue per available seat mile grew by 4.5% to $12.60 compared to the third quarter in 2011. AMR extracted more revenue from passengers despite a 1.8% year-over-year reduction in traffic and a 2.5% decrease in capacity.

The third quarter results slow the rate of AMR's financial losses this year, which already total $2.14 billion through 30 September. But special charges and reorganization items account for the vast bulk of the losses, consuming $2.1 billion in cash.

As of 30 September, AMR carried $5.1 billion in cash and short-term investments, a $300 million improvement over the same period a year ago.