AMR profits double in July on strong summer travel

Posted Monday, Aug. 26, 2013  comments  Print Reprints
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A strong summer travel season helped American Airlines’ parent company, AMR Corp., record a $292 million profit in July, according to a court document filed Monday.

The Fort Worth-based carrier has also benefited from lower operating costs — labor costs dropped 12 percent from July 2012 — thanks to its bankruptcy restructuring. The July profits are double what the airline earned in the same month last year.

“We are completing one of the most successful turnarounds in aviation history,” AMR Chief Executive Tom Horton told employees in a letter. “We are building a strong, competitive and profitable new American poised to lead again.”

AMR has agreed to merge with US Airways. But the proposed deal hit a snag two weeks ago when the Justice Department filed an antitrust lawsuit to stop the merger. A federal district judge could set a trial date in the lawsuit this week.

Excluding $57 million in reorganization fees, the Fort Worth-based carrier posted a monthly operating profit of $349 million. The financial disclosure is part of the monthly operating reports AMR is required to file with the Bankruptcy Court.

The company said it spent $28 million on aircraft financing renegotiations and rejections and $27 million on professional fees during the month. It also spent $2 million on “other” reorganization items, which are not detailed in the report.

AMR also said its mainline carrier, American Airlines, had passenger revenues of $1.9 billion and its regional affiliates, including American Eagle, brought in $270 million. Total revenues for the month were $2.48 billion.

In filing its antitrust suit, which contends that the merger would harm consumers with higher fares and fees, Justice Department attorneys cited the strong revenues and profits being reported by American and US Airways as evidence that the deal is not necessary to keep the airlines afloat.

In the first seven months of the year, AMR has reported cumulative net income of $170 million with $15 billion in revenue.

The company ended the month with $611 million cash and $5.2 billion in short-term investments for a total of about $5.8 billion on hand. That number does not include $933 million in restricted cash.

The Bankruptcy Court has scheduled a hearing for Thursday to discuss the impact of the Justice Department antitrust suit, and the judge could decide whether he will confirm AMR’s restructuring plan, which includes the proposed merger.

Andrea Ahles, 817-390-7631 Twitter: @Sky_Talk

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