Thu, Apr 21, 2011
Part Of Cost-Savings Measures Announced In First Quarter
Report
American Airlines reported a net loss of $463 million in the
first quarter of 2011, driven in large part, the airline said, by
rising fuel prices. In a news release, the company reported
achieving improved year-over-year results in spite of sharply
rising fuel prices that increased 24 percent compared to the first
quarter 2010. Including the impact of fuel hedging, AMR paid on
average $2.76 per gallon for jet fuel in the first quarter of this
year versus $2.23 per gallon in the first quarter 2010. As a
result, the Company paid $351 million more for fuel in the first
three months of 2011 than it would have paid at prevailing prices
from the corresponding prior-year period.
As part of its cost-savings measures, the airline said Wednesday
that it plans to reduce its fourth quarter 2011 system capacity by
an incremental 1 percent. This cut is in addition to the capacity
reduction already announced by American in March and further
demonstrates the flexibility provided by its MD-80 fleet. American
now intends to retire at least 25 MD-80s in 2011, as part of the
company's plan to continue renewing its fleet, while addressing the
current fuel environment.
The airline also reports that it now has five 777-300ERs that
are scheduled for delivery in 2012 and 2013, including two
additional aircraft for which options were recently exercised.
These 777-300ERs will complement American's fleet, offering
additional network flexibility in the future, and providing
increased efficiency due to better seat mile economics and
performance characteristics.
"High fuel prices remain one of the biggest challenges to our
industry and our company. We believe our steps to aggressively
increase revenues, reduce capacity, control non-fuel operating
costs, and bolster liquidity will help us to better manage the
challenges we currently face," said AMR Chairman and CEO Gerard
Arpey. "While we clearly must achieve better results as we continue
to strengthen our business, we have made some meaningful progress.
I want to thank our people for their commitment to serving our
customers, and I am confident that our overall strategy positions
American well to address our current challenges and sets the stage
for long-term success."
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