AMR Corporation loses $286 million in the second quarter

AMR Corporation (Dallas/Fort Worth), despite the large Airbus and Boeing order, continues to lose money.

AMR Corporation, the parent company of American Airlines, Inc., today reported a net loss of $286 million for the second quarter of 2011, or $0.85 per share, compared to a net loss of $11 million, or $0.03 per share, in the second quarter of 2010.

The Company’s second quarter performance was negatively impacted by fuel prices that increased 31 percent compared to the second quarter 2010. Including the impact of fuel hedging, AMR paid on average $3.12 per gallon for jet fuel in the second quarter of this year versus $2.37 per gallon in the second quarter 2010. As a result, the Company paid $524 million more for fuel in the second quarter 2011 than it would have paid at prevailing prices from the corresponding prior-year period.

American outlined several immediate actions the company is taking to be more competitive and efficient, including the following:

1. American has adjusted its network for the fall, with the cancellation of its San Francisco to Honolulu and Los Angeles to San Salvador flights, as well as a number of other adjustments to reduce costs and improve revenue performance.

2. In conjunction with American’s trans-Atlantic joint business partners, the company is evaluating its winter flying, and anticipates making seasonal route and day-of -week flying adjustments in early 2012 to improve its results.

3. American announced today it intends to discontinue operating its reservations office in Dublin, Ireland, to reduce its operating costs.

4. American also applied for a waiver from the U.S. Department of Transportation to temporarily suspend service from New York’s JFK to Tokyo’s Haneda Airport through mid-2012. American plans to suspend its service to Haneda beginning in early September in an effort to help it offer service more in line with market demand, as Japan continues to recover from March’s earthquake and tsunami.

Can AMR turn it around financially with these limited measures, a large aircraft order and the sale of American Eagle?

Copyright Photo: Bruce Drum. Please click on the photo for the full details on the Boeing order.