DALLAS (AP) — A drop in travel during the recession pushed American Airlines parent AMR Corp. to a $390 million loss in the second quarter.
AMR said Wednesday that excluding charges related to the sale and grounding of planes, it would have lost $319 million, or $1.14 per share.
That was a narrower loss than analysts expected. Analysts surveyed by Thomson Reuters predicted a loss excluding charges of $1.28 per share.
In the same quarter last year, AMR lost $1.46 billion, or $5.83 per share, mostly for writing down the value of its fleet. Without the charges, the year-ago loss was $298 million.
Revenue in April through June dropped 21 percent, to $4.89 billion. AMR said the swine flu outbreak cost it $50 million to $80 million in revenue.
The AMR report was the first from major U.S. carriers covering the April-to-June quarter, usually a good one for travel. But companies have reduced travel due to the recession, and that's hurting the airlines.
"The challenges for our industry and company have continued throughout 2009," said Gerard Arpey, chairman and CEO of the Fort Worth-based airline.
Arpey pointed to the global economic slump and its effect on travel demand and oil prices that have been rising lately, pushing up the price of jet fuel.
Still, oil prices are far below the record levels of last summer. In the just-concluded quarter, AMR spent 45 percent less on fuel than it did a year ago, a savings of nearly $1.1 billion. But revenue fell nearly $1.3 billion.
Traffic on American dropped 8.2 percent in the second quarter. That was faster than the carrier could cancel unprofitable flights, which reduced capacity by 7.6 percent from a year earlier.
American expects capacity in the third quarter to be 8.5 percent lower than last summer, with a 10.5 percent reduction in the U.S.
Airlines can reduce capacity — or the number of seats in the air — by cutting flights or flying smaller aircraft.
Not only are fewer passengers traveling, but they're less likely to buy high-priced tickets. That's due to the downturn in business travel and a spate of fare sales launched by carriers eager to fill empty seats.
As a result, American's average fare in the second quarter fell 15.4 percent from a year ago.
American tried to make up the difference in other ways. Ancillary revenue such as fees for checking luggage and buying food on board rose 7.4 percent to $565 million in the second quarter.
The airline recently indicated it would cut at least 1,600 jobs beginning in late August, when the peak summer travel season winds down.
AMR ended June with the equivalent of 79,200 full-time workers; 66,900 at American and 12,300 at regional affiliate American Eagle.
Shares of AMR rose 8 cents to $4.26 in morning trading.
Copyright 2009 The Associated Press.
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