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AMR reports $45 million profit for 3Q

AMR Corp., the parent company of American Airlines, reported a profit of $45 million during the third quarter, pushed by a windfall from the sale of its American Beacon subsidiary.

The Fort Worth-based airline also said it plans to buy 42 new Boeing 787 “Dreamliner” widebody jets between 2012 and 2018, and may purchase an additional 58 jets by 2020.

Excluding special items, AMR lost $360 million during the quarter, as high fuel prices pounded the carrier’s bottom line. The airline spent $1.1 billion more on jet fuel compared to the third quarter of 2007.

Per share, the loss was $1.39, about what was expected by analysts. AMR earned a profit of $175 million, or about 61 cents per share, during the same period last year.

AMR earned $432 million during the quarter from the sale of Beacon, an investment firm which manages AMR's employee pensions, among other things.

“While fuel prices have fallen from record high levels a few months ago, the economic uncertainty, and what that might mean for travel demand, is a serious concern,” said Gerard Arpey, the airline’s chief executive, in a prepared statement. “It would also be shortsighted to conclude that fuel prices, which remain volatile, are no longer a challenge.”

The new planes will help reduce the company’s fuel and maintenance costs, Arpey said. But the purchase also hinges on the airline coming to an agreement with its pilots' union, he said. The current contract does not include provisions for operating 787s.

American and the union have been negotiating a new contract for two years, but so far little progress has been made. The decision to buy new planes will likely give pilots some additional leverage in talks

"We're always pleased to see the company investing in new airplanes," said Kevin Cornwell, a spokesman for the Allied Pilots Association. He added that he's a "big fan" of Boeing jets.

Still, he added, "we're still waiting for the company to start re-investing in its employees."

The airline will need an agreement with pilots by March 2011 if it wants to order the new planes on time, said Tom Horton, AMR's chief financial officer. He said he's confident a contract will be in place by then.

"We feel like we have a strong future at American, but we have to plan for it," Horton said. "That's what this is all about."

American had previously announced plans to buy more Boeing 737 planes to replace its older MD-80 narrowbody aircraft.

Despite the impact of high fuel prices, the outlook for AMR and the airline industry overall has been boosted in recent weeks as oil prices have fallen. Analyst Daniel McKenzie of Credit Suisse said in a recent report that AMR may spend $1 billion less on jet fuel next year than he had previously estimated.

“Our liquidity concerns have dissipated,” McKenzie wrote. He currently rates AMR’s stock as “neutral.”

Arpey is scheduled to discuss the results with analysts on a conference call at 1 p.m. Shares of AMR were up 30 cents at $9.09 per share in mid-morning trading.