American Airlines’ parent earns $289 million in 3Q
THE ASSOCIATED PRESS October 17, 2013 8:48AM
Updated: October 17, 2013 9:01AM
DALLAS — After years of losses, American Airlines is making money by boosting revenue and cutting labor costs.
Parent company AMR Corp. said Thursday that it earned $289 million, or 76 cents per share, in the third quarter. That’s a turnaround from a loss of $238 million, or 71 cents per share, a year earlier.
Adjusted profit was a record $530 million. That figure doesn’t include bankruptcy-reorganization costs and other special items.
Revenue rose 6 percent, as passengers paid more per mile to fly on the nation’s third-biggest airline. Labor costs fell 13 percent from a year ago, as the company cut jobs during its bankruptcy makeover.
Chairman and CEO Tom Horton said the airline’s improved performance “creates strong momentum towards our planned merger with US Airways.”
The airlines had expected to close the merger this summer but were delayed when the U.S. Justice Department and several states filed an antitrust lawsuit to block the deal. A trial on the lawsuit is scheduled to start Nov. 25, and Horton repeated this week that the companies remain open to negotiating a settlement that would allow them to combine.
AMR filed for bankruptcy protection in 2011 after losing more than $10 billion over the previous decade. It has used bankruptcy to renegotiate deals with labor unions and suppliers, which showed up in a 4 percent reduction in third-quarter operating costs. Labor costs fell $230 million in a year — nearly the entire amount of AMR’s net income for the third quarter.
AMR ended the quarter with $7.7 billion in cash and short-term investments, compared with $5.1 billion a year earlier.
The Fort Worth, Texas-based company set aside $59 million for expected profit sharing next spring. American Airlines employees haven’t received such payouts since 2001.