AMR cuts labor costs, posts 4Q profit of $262M

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Associated Press

Posted on January 16, 2013 at 9:00 AM

Updated Wednesday, Jan 16 at 10:30 AM

DALLAS (AP) — The parent of American Airlines said Wednesday that it earned $262 million in the fourth quarter, a turnaround from a year-ago loss as the company goes through a bankruptcy restructuring.

AMR Corp. has been cutting jobs and reworking labor contracts. It slashed labor costs by 13 percent compared with the fourth quarter of 2011.

One-time gains such as an income tax benefit helped. Without those, AMR said Wednesday that it would have lost $88 million.

Revenue ticked down to $5.94 billion from $5.96 billion a year earlier.

The quarter included disruptions from Superstorm Sandy and fallout from what the company called a pilot work slowdown. American ranked last among the 15 biggest U.S. airlines in on-time arrivals during November, according to government figures.

The fourth-quarter profit, even one earned with the benefit of one-time gains, comes as AMR continues to study whether it should merge with US Airways or exit bankruptcy on its own. CEO Thomas Horton has promised a decision within weeks.

American is the nation's third-biggest airline and US Airways ranks fifth in passenger traffic. Combined, however, they would be roughly the same size as world leader United Airlines and slightly bigger than Delta Air Lines.

AMR filed for bankruptcy protection in November 2011 after losing more than $10 billion over the previous decade. For all of 2012, it lost $1.9 billion, much of which was due to restructuring costs. Without those items, the company said its full-year loss would have been $130 million, a $932 million improvement over 2011.

"We have made enormous progress towards building the new American," Horton said in a statement. "With what we have accomplished, we expect to show strong results beginning in the first quarter of 2013."

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