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Wednesday, October 21, 2009

American Airlines 3Q Revenue Drops 20%

By Kathryn Elizabeth Tuggle

FOXBusiness

AMR (AMR), the parent company of American Airlines, reported a 20% drop in third-quarter revenue, though sales did manage to top analysts' expectations.

Revenue at American fell to $5.13 billion, while analysts polled by Thomson Reuters expected revenue of $5.09 billion. The company posted losses of $359 million, or $1.26 a share, compared with year-ago losses of $31 million, or 12 cents a share.

Shares of AMR are down by almost a third for the year, yet industry-wide results have been better than expected, with Southwest Airlines (LUV) and United Airlines (UAUA) reporting lower losses than expected.

During the quarter, the company said it boosted its liquidity via financing deals which totaled $5 billion, cut unprofitable routes, and started charging additional fees to passengers.

American’s load factor, a measure of seats filled, rose from 82.2% to 83.9%, a record high. Fuel prices also dropped by 42%, to $2.07 per gallon. In the fourth quarter, AMR said that fuel may go up to $2.12 per gallon, and that capacity may fall 6%.

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