FORT WORTH -- AMR Corp. made it into the black in the fourth quarter after a year of cleaning up its balance sheet and cutting costs while operating in Bankruptcy Court.
On Wednesday, the Fort Worth-based carrier posted a $262 million profit for the quarter even though business was hurt by Superstorm Sandy and by operational issues at American Airlines in the early fall.Net income was bolstered by $280 million from the "settlement of a commercial dispute," most likely its lawsuit with Southlake-based Sabre Holdings. For the full year, AMR posted a $1.87 billion loss, an improvement over its $1.98 billion loss in 2011 but still sour in a year when other airlines have made money. And the losses came as AMR recorded record revenue of $24.85 billion.With better finances and new labor contracts, the carrier plans to unveil a new "brand" and logo soon."Having reached the vast majority of our restructuring milestones already, we can now focus on the new American becoming reality," AMR Chief Executive Tom Horton said in a letter to employees. "With all of these changes, our company will very quickly begin to look and feel very different -- both inside and out."Horton has openly talked about the rebranding of American for the past few months, including a new color scheme on planes that have traditionally flown with their shiny metal exposed.When the carrier received its new Boeing 777-300ER from the manufacturer in December, the plane's tail lacked the usual "AA" logo.The makeover -- a typical move when an airline emerges from bankruptcy -- also comes as American is considering a merger with US Airways.Horton told employees that the carrier is completing its evaluation of "whether a merger is the right step for American at this time."During the fourth quarter, revenue was depressed by $155 million because of Superstorm Sandy, which swamped the East Coast in November, and because of operational disruptions in late September and early October. Thousands of flights were delayed or canceled as pilots filed last-minute maintenance requests. The pilots union denied staging a work slowdown.Excluding one-time items and reorganization costs, AMR would have posted a loss of $88 million for the quarter.Accounting items totaled a net benefit of $350 million, including $441 million in charges related to restructuring debt, aircraft leases and professional fees paid during bankruptcy.Jet fuel costs continued to rise. American paid $3.22 per gallon, compared with $3.01 in the fourth quarter of 2011.Industry analyst Bob Herbst, founder of AirlineFinancials.com, is not impressed with AMR's fourth-quarter results, since other carriers are expected to post much larger operating profits in the quarter and for the year.Delta Air Lines is likely to post an operating profit of more than $1.5 billion for 2012."The bottom line for the numbers that count, for their net profit and loss, is they lost $88 million in the fourth quarter when almost every other airline is going to report a profit," Herbst said."That to me is astounding. American is in bankruptcy and cutting costs in bankruptcy and had record revenues and they're still going to lose millions of dollars."AMR's annual results also include $1.7 billion in reorganization items as it renegotiated financing terms on more than 400 aircraft and renegotiated contracts with over 9,000 vendors and suppliers.AMR filed for bankruptcy protection in November 2011.The company ended 2012 with about the same amount of cash on hand as in 2011.AMR reported that it had $4.7 billion in cash and short-term investments, including a restricted cash balance of $850 million, by the end of the fourth quarter.Going into 2013, the carrier estimates that its first-quarter capacity will decline 1.7 percent as it continues to retrofit aircraft with the Main Cabin Extra program.It expects to receive 59 new mainline aircraft in 2013 and will continue to retire its aging fleet of MD-80s and Boeing 757s.Andrea Ahles, 817-390-7631Twitter: @Sky_Talk
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