Tag Archives: AMR Corporation

Bankruptcy court judge denies American’s request to void the pilot’s current contract

American Airlines (Dallas/Fort Worth) through the bankrupt AMR Corporation has received a setback in its efforts to impose a lower cost base contract for its pilots, represented by the Allied Pilots Association (APA). According to this report by Reuters, the bankruptcy court judge Sean Lane has denied management’s request to void the current collective bargaining contract with the pilots. Previously the pilots rejected an interim contract that would have lowered wages and benefits.

APA sees this ruling as a victory. AMR can now amend the motion or go back to the negotiating table with the union.

Read the full report: CLICK HERE

Copyright Photo: Michael B. Ing. Boeing 737-823 N973AN (msn 29548) climbs away from the runway at Los Angeles International Airport (LAX).

American Airlines:

AMR Corporation posts a net loss of $241 million in the second quarter due to special items

AMR Corporation (Dallas/Fort Worth), the parent company of American Airlines, Inc., today reported second quarter revenue of $6.5 billion, an increase of 5.5 percent year-over-year and the highest quarterly revenue in company history.

In the second quarter of 2012, the company reported a net profit of $95 million, excluding reorganization and special items – a $381 million improvement over the second quarter of 2011. AMR incurred a net loss of $241 million compared to a net loss of $286 million in the same period of 2011.

Consolidated passenger revenue per available seat mile (unit revenue) grew 9.1 percent compared to the second quarter of 2011, and mainline passenger unit revenue increased 8.7 percent.

Consolidated passenger yield, representing average fares paid, increased 7.1 percent year-over-year in the second quarter of 2012, and mainline passenger yield increased 6.8 percent.
Mainline capacity, or total available seat miles, in the second quarter of 2012 decreased 2.4 percent compared to the same period in 2011.
American’s second quarter 2012 mainline load factor, or the percentage of total seats filled, was 85.1 percent – a record for any quarter.

The company’s revenue performance was driven by year-over-year yield improvement and a higher consolidated load factor of 84.5 percent – a record for any quarter as well. Domestic unit revenue improved 8.6 percent in the second quarter versus the same period last year and, for the second consecutive quarter, the company experienced unit revenue increases across all five of its hubs. These results were supported by strong corporate revenue growth.

International unit revenue increased 9.0 percent in the second quarter, driven by increased load factors across all entities, and strong yield performance. Premium cabin demand improved significantly in both the Atlantic and Pacific entities, generating unit revenue increases of 8.5 percent and 18.1 percent, respectively. American and its joint-business partners, British Airways and Iberia over the Atlantic, and Japan Airlines over the Pacific, have gained momentum in attracting high-value customers to the airlines’ enhanced networks. The Latin American entity posted a 6.7 percent unit revenue increase in the second quarter of 2012, including yield improvements in Mexico and Central and South America.

The second quarter 2012 results include $336 million in special charges and reorganization items.

Of that amount, $106 million is related to a special charge, primarily associated with employee severance-related costs.
The company recognized $230 million in reorganization items resulting from its and certain of its direct and indirect U.S. subsidiaries’ voluntary petitions for reorganization under Chapter 11 on Nov. 29, 2011. These items are primarily from estimated claims associated with restructuring the financing arrangements for certain aircraft and rejecting certain special facility revenue bonds, as well as professional fees.

Taking into account the impact of fuel hedging, AMR paid approximately $3.24 per gallon for jet fuel in the second quarter of 2012 versus approximately $3.12 per gallon in the second quarter of 2011, a 3.8 percent increase. As a result, the company paid $81 million more for fuel in the second quarter of 2012 than it would have paid at prevailing prices from the prior-year period.

AMR ended the second quarter with approximately $5.8 billion in cash and short-term investments, including a restricted cash balance of $772 million, compared to a balance of approximately $5.6 billion in cash and short-term investments, including a restricted balance of approximately $457 million, at the end of the second quarter of 2011.

At November 30, 2011, the company had approximately $4.8 billion in cash and short-term investments, including a restricted cash balance of $693 million.

Later this year, the company will start placing into service the newest addition to its fleet, the Boeing 777-300 ER, which will showcase a number of special features, including fully lie-flat First and Business Class seating, with direct aisle access from every seat; specially designed Main Cabin Extra seating with more legroom and comfort; international Wi-Fi and in-seat entertainment throughout all cabins.

In addition, the company recently unveiled plans for upgrading its international widebody fleet of Boeing 777-200 ERs and Boeing 767-300 ERs, which will also offer industry-leading interiors and amenities as well as fully lie-flat Business Class seats with aisle access for every seat.

Copyright Photo: Andi Hiltl. Boeing 767-323 ER N395AN dressed in the Oneworld motif prepares to touch down at Zurich. Meanwhile Willie Walsh, chief executive of the International Airlines Group (IAG), told a meeting of aviation industry representatives he supports any merger that will strengthen its oneworld alliance partner American Airlines according to this report by Reuters.

Read the full story: CLICK HERE

American Airlines:

Unsecured creditors give American until December 27 to work out their own reorganization plan

American Airlines (Dallas/Fort Worth)’ unsecured creditors are giving AMR some space and time to work out their own reorganization plan. This time period will keep US Airways (Phoenix) away (for now) if the bankruptcy court grants this motion to AMR management.

The company has issued this short statement:

“AMR Corporation, the parent company of American Airlines, yesterday (June 29) announced that the Company and the Official Committee of Unsecured Creditors (UCC) have agreed to jointly request that the United States Bankruptcy Court for the Southern District of New York extend exclusivity for AMR to file its Plan of Reorganization to December 27, 2012.”

US Airways and the unions have not yet commented on this statement. Stay tuned.

American:

US Airways to file for antitrust immunity next month for a merger with American Airlines

US Airways (Phoenix) is planning to file the necessary paperwork with the antitrust regulators for a proposed merger with AMR Corporation (Dallas/Fort Worth), the bankrupt parent of American Airlines (Dallas/Fort Worth), according to this report by Reuters. US Airways believes such a filing would ease antitrust concerns about a possible merger. Meanwhile American’s management is proceeding with their own Chapter 11 reorganization as a stand-alone carrier despite undying pressure from the unsecured creditors and the unions to consider a merger with US Airways.

Read the full report: CLICK HERE

Top Copyright Photo: Jay Selman.

US Airways:

American:

Bottom Copyright Photo: Bruce Drum.

AMR continues to bleed, loses $142 million in April

AMR Corporation (Dallas/Fort Worth), the parent of American Airlines and American Eagle Airlines, continues to lose large amounts of money, losing $142 million in April alone as revenue did not keep up with its increasing costs, despite its Chapter 11 reorganization process.

Read the full report from Bloomberg Businessweek: CLICK HERE

American Airlines:

American Eagle:

American Airlines’ lawyers argue in bankruptcy court to throw out all of the labor contracts, union’s lawyers argue for a merger with US Airways

American Airlines’ (Dallas/Fort Worth) lawyers presented their case yesterday (April 23) before the bankruptcy court to throw out all of the existing labor contracts stating the airline cannot survive under the current labor contracts. AMR has lost around $12 billion since 201. Lawyers for the various labor groups are arguing a merger with US Airways (Phoenix) would save jobs and make the new company even stronger. AMR wants to cut around 13,000 jobs.

According to this article by Bloomberg Businessweek, “US Airways CEO Doug Parker says he would keep both airlines’ hubs and planes, stick with the American Airlines name, and create a bigger company that could compete against United and Delta. But AMR CEO Thomas Horton says he’s not interested in a merger until his company finishes cutting costs in bankruptcy.”

Read the full article: CLICK HERE

American Slide Show: CLICK HERE

AMR loses $1.7 billion in the first quarter as it reorganizes under Chapter 11, American to restore the Miami-Seattle route

AMR Corporation (American Airlines and American Eagle Airlines) (Dallas/Fort Worth) incurred a net loss of $1.7 billion compared to a net loss of $436 million in the same period of 2011. Excluding reorganization and special items, the net loss was $248 million compared to the net loss of $405 million for first quarter 2011.

AMR recorded first quarter 2012 consolidated revenues of approximately $6.0 billion, an increase of 9.1 percent year-over-year. Consolidated passenger revenue per available seat mile (unit revenue) grew 10.3 percent compared to the first quarter 2011, and mainline passenger unit revenue increased 10.0 percent.

Consolidated passenger yield, which represents the average fares paid, increased 7.4 percent year-over-year in first quarter 2012, and mainline passenger yield increased 7.3 percent.
Mainline capacity, or total available seat miles, in first quarter 2012 increased 0.2 percent compared to the same period in 2011.
American’s mainline load factor, or the percentage of total seats filled, was 79.0 percent during first quarter 2012, compared to 77.1 percent in first quarter 2011.

The Company’s revenue performance was driven by significant demand and a positive pricing environment that resulted in higher load factors and better yields. Domestic unit revenues increased across all five of the Company’s hubs. International performance was improved across all regions, with unit revenue in the Atlantic entity increasing by 9.7 percent in first quarter 2012 versus the same period last year, as American continues to capitalize on its joint trans-Atlantic business with British Airways and Iberia by offering an expanded network to its business customers. Latin America, the Company’s largest international entity, posted a unit revenue increase of 10.8 percent in first quarter 2012 driven by yield improvements in Mexico, Central and South America.

AMR’s consolidated operating expenses, excluding special items, were $6.1 billion, 6.6 percent above the same period last year. Consolidated unit costs increased 0.9 percent year-over-year, excluding fuel costs, which includes benefits the Company realized from improved operating performance due, in part, to mild weather in the quarter and restructuring related cost savings from renegotiated aircraft leases and approval of the Company’s motions to reject certain facility agreements and other obligations.

Reorganization Expenses

The Company’s first quarter results include approximately $1.4 billion in reorganization items resulting from the voluntary filing by the Company and certain of its direct and indirect U.S. subsidiaries of petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on November 29, 2011.
Of the reorganization items, approximately $1.0 billion is related to the Company’s aircraft financing renegotiations and rejections, which includes the modification of 158 aircraft leases; as well as the rejection of eight leases relating to seven Boeing 757-200 aircraft, one McDonnell Douglas MD-80 aircraft, and eight spare engines. The Company also rejected one Airbus A300-600R aircraft that was subject to a mortgage.
$340 million is attributable to the Company’s motion to reject facility agreements supporting special facility revenue bonds at Dallas/Fort Worth International Airport and Fort Worth Alliance Airport.
$45 million is related to an accrual for professional fees.

Fuel Impact

Taking into account the impact of fuel hedging, AMR paid approximately $3.24 per gallon for jet fuel in first quarter 2012 versus approximately $2.76 per gallon in first quarter 2011, a 17.6 percent increase. As a result, the Company paid $325 million more for fuel in first quarter 2012 than it would have paid at prevailing prices from the prior-year period.

Cash Position

AMR ended the first quarter with approximately $5.6 billion in cash and short-term investments, including a restricted cash balance of $771 million and approximately $9 million of collateral relating to fuel hedging transactions, compared to a balance of approximately $6.3 billion in cash and short-term investments, including a restricted cash balance of $455 million and approximately $390 million of collateral relating to fuel hedging transactions, at the end of first quarter 2011.

As of November 30, 2011, the Company had approximately $4.8 billion in cash and short-term investments, including a restricted cash balance of $693 million.

Copyright Photo: Brian McDonough. American Airlines will restore the Miami-Seattle/Tacoma route on June 14. The restored route will be operated with Boeing 757-200s. Alaska Airlines is shifting its SEA-MIA route to Fort Lauderdale/Hollywood.

American Slide Show: CLICK HERE

AMR offers to freeze its pensions, not eliminate them

AMR Coporation (Dallas/Fort Worth), the parent of American Airlines and American Eagle Airlines (2nd), has backed off on the issue of employee pensions. AMR is now proposing to freeze its pensions, not eliminate them.

Read the full story from Reuters: CLICK HERE

American Slide Show: CLICK HERE

Allied Pilots Association files lawsuit with AMR Bankruptcy Court “to clarify legal gray area”

American Airlines (Dallas/Fort Worth) is experiencing more push-back from its employee groups. The latest challenge is coming from its pilots represented by the Allied Pilots Association. The APA has issued the following statement concerning their lawsuit presented to the AMR Corporation Chapter 11 bankruptcy court.

“The Allied Pilots Association (APA), certified collective bargaining agent for the 10,000 pilots of American Airlines, filed an action for declaratory judgment today with the bankruptcy court asking the judge to clarify how the Railway Labor Act and Section 1113 of the U.S. Bankruptcy Code interrelate.

“Our objective is to enhance the prospects of a consensual agreement between the Allied Pilots Association and airline management in the ongoing restructuring negotiations,” said APA President Captain Dave Bates. “APA believes that a consensual agreement between our union and airline management is in our company’s long-term best interests. Accordingly, APA has asked the bankruptcy court to clarify a legal gray area regarding rejection of airline industry collective bargaining agreements in bankruptcy.”

While Section 1113 of the U.S. Bankruptcy Code outlines procedures for rejecting existing labor contracts during their term, the comprehensive collective bargaining agreement between APA and American Airlines expired in 2008. Since then, APA and American Airlines have been negotiating under federal labor law provisions that prohibit airline management from changing rates of pay, rules and working conditions until the National Mediation Board (NMB) finishes mediating toward an agreement.

“The Railway Labor Act provides specialized procedures for peaceful resolution of labor contracts in the airline industry, and the conflict between the bankruptcy code and the Railway Labor Act’s requirements has not been thoroughly adjudicated,” Bates said.

Under the terms of the Railway Labor Act, the status quo period remains in force until the NMB declares a negotiations impasse and proffers binding interest arbitration. APA has been seeking such a proffer from the NMB. If either party declines the proffer, a 30-day cooling-off period begins.

“While the Railway Labor Act permits self-help by both parties, in a significant Chapter 11 proceeding such as AMR’s reorganization, it is conceivable that the White House would appoint a Presidential Emergency Board (PEB) before the end of the cooling-off period to prevent disruption to interstate commerce,” Bates said.

The PEB would examine the unresolved bargaining items and issue a settlement recommendation.

“The Railway Labor Act represents the more promising path to a consensual agreement by offering multiple options for dispute resolution at different junctures in the bargaining process,” Bates said.”

American Slide Show: CLICK HERE

AMR loses big in the 4Q and 2011

American Airlines Boeing 777-223 N759AN (msn 32638) (Susan G Komen) MIA (Brian McDonough), originally uploaded by Airliners Gallery.

AMR Corporation (Dallas/Fort Worth) AMR recorded a consolidated net loss of $1.1 billion for the fourth quarter of 2011 compared to a consolidated net loss of $97 million in the fourth quarter of 2010. The fourth quarter 2011 results include:

$886 million in non-cash special charges and reorganization items.

Of that amount, $768 million is related to special items, which includes a $725 million non-cash charge resulting from the impairment of certain aircraft and gates and a $43 million unfavorable adjustment to revenue, as a result of changes in assumptions related to the recognition of AAdvantage® revenue.

The Company recognized $118 million in reorganization items, primarily due to the rejection of 24 leased aircraft: 20 MD-80s and 4 Fokker 100s; as well as professional fees.

Excluding these items, the loss in the fourth quarter of 2011 was $209 million, which compares to a loss, excluding special items, of $69 million in the same period of 2010.

For fiscal 2011, AMR recorded a consolidated net loss of approximately $2.0 billion, which compares to a consolidated net loss of $471 million for fiscal 2010.

Fiscal Year 2011 results include:

$917 million in non-cash special charges and reorganization items.

Of that amount, $799 million is related to special items, which includes a $725 million non-cash charge resulting from the impairment of certain aircraft and gates, $31 million of non-recurring non-cash charges related to certain sale/leaseback transactions, and a $43 million unfavorable adjustment to revenue, as a result of changes in assumptions related to the recognition of AAdvantage revenue.

The Company also recognized $118 million in reorganization items, primarily due to the rejection of 24 leased aircraft: 20 MD-80s and 4 Fokker 100s; as well as professional fees.

Excluding the items described above, the Company’s consolidated net loss was approximately $1.1 billion in 2011, versus a consolidated net loss of $389 million excluding special items in 2010.

For fiscal year 2011, including the impact of fuel hedging, AMR paid an average of $3.01 per gallon for jet fuel compared to an average of $2.32 in 2010, a 30.1 percent increase. As a result, the Company paid nearly $2.0 billion more for jet fuel in full-year 2011 than it would have paid at prevailing prices in the prior full-year period.