AMR Corp., the parent of American Airlines, reported a $1.4 billion loss, or $5.77 per share, for the second quarter on Wednesday, despite increasing revenues by 5 percent.
The Fort Worth-based company said record jet fuel prices hurt the airline’s earnings as it paid $779 million more for fuel in the second quarter of 2008 than the same period last year. AMR added that $1.1 billion in accounting charges related to the decreasing value of aircraft in its fleet contributed to the airline’s quarterly losses.
"Our company continues to be severely challenged by the fuel crisis that has afflicted our entire industry, and we expect these difficulties to continue for the foreseeable future," said AMR chairman and chief executive Gerard Arpey. "Clearly, our second quarter results were disappointing."
AMR reported revenues of about $6.2 billion, up from $5.8 billion from the second quarter of 2007. The second quarter loss compares to a profit of $317 million, $1.08 per share, in the same period last year.
Despite the heavy quarterly losses, the company lost less money than Wall Street analysts forecasted.
Analysts typically exclude one-time accounting charges and expected AMR to lose $1.40 per share. Without the charges, AMR had a second quarter loss of $284 million, or $1.13 per share.
Wall Street investors bid AMR stock up more than 20 percent in morning trading. At 10:30 a.m., AMR stock was trading at $5.33, up 92 cents from the previous day’s close.
The airline also announced it will retire all 34 of its A300 aircraft by the end of next year which will lead to fewer flights as the airline cuts capacity.
AMR said it has placed on hold its decision to divest American Eagle, its regional airline, until “industry conditions are more stable and more favorable.”
"We remain committed to taking action – whether that relates to capacity reductions, revenue enhancements, fleet changes or other efforts to improve our financial foundation – as we work to secure our long-term future," Arpey said in a statement.