American Airlines to take $60 million hit from winter storms
04/08/2014 12:28 PM
04/08/2014 12:57 PM
Winter storms, which caused American Airlines to cancel 34,000 flights in the first quarter, cost the company $115 million in revenue and will reduce its profits by $60 million, the company said Tuesday.
The disclosure came as American reported traffic data for March. The Fort Worth-based airline saw passenger traffic grow by 0.9 percent as it increased capacity by 2.9 percent. Its load factor dropped 1.6 percentage points to 81.8 percent compared with 2013. The figures include US Airways operations, added with the December merger of the two airlines.
American said it expects operating margins to be 5 to 7 percent and unit revenue to be up 2.5 to 3.5 percent in the first quarter compared with the same period last year.
Separately, American said in an investor update that it is changing firm orders for 30 Airbus A320 NEO aircraft into options. The planes were scheduled to be delivered in 2021 and 2022 as part of the company’s large order of 260 Airbus narrow-body aircraft announced in 2011.
The carrier also said it has terminated its lease financing arrangements for 62 Airbus A320s that it’s scheduled to receive between 2015 and 2017 and will buy the aircraft instead.
This year, American expects to receive 83 mainline aircraft and retire 80 older and less-fuel-efficient planes. By the end of the year, American estimates that it will have 973 aircraft, only three more than in 2013.
For its regional subsidiaries, American said it will receive 15 CRJ-900s for PSA Airlines. An additional 4 CRJ-900s and 24 Embraer 175s will also be delivered, but American has not determined which regional partner will fly those.
Recently, American Eagle pilots turned down a cost-cutting contract that would have guaranteed that Eagle operated larger regional jets. Without the new concessions, American management has said it plans to shrink Eagle’s operations. And in the investor update, it said it will retire 40 Embraer 140s, operated by Eagle.
Former AMR shareholders, labor unions and creditors will also receive another common stock distribution Wednesday, marking the 120th day since the merger.
As part of the bankruptcy restructuring plan, unions will receive their final stock distribution, 11.66 million shares, while creditors who hold convertible preferred stock will see their 12.2 million shares converted into common stock.
AAMRQ shareholders will receive an additional 0.186 share of the new stock, AAL, for a total of 0.744 share for every share of AAMRQ.
Based on Tuesday’s AAL closing price of $35.98, one share of former AAMRQ stock is worth $26.77.
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