Fort Worth-based AMR reports a first quarter 2008 net loss of $328 million

by PegNews wire

The loss was primarily due to a $665 million increase in fuel costs from last year.

FORT WORTH — AMR Corporation, the parent company of American Airlines, Inc., today reported a net loss of $328 million for the first quarter of 2008. The current quarter results compare to a net profit of $81 million for the first quarter of 2007.

Photo not provided by AMR

American plans on using far more fuel-efficient aircraft from now on

Record jet fuel prices contributed significantly to AMR's loss in the first quarter of 2008. The company paid $665 million more for fuel in the first quarter of 2008 than it would have paid at prevailing prices from the prior-year period. AMR paid $2.74 per gallon for jet fuel in the first quarter compared to $1.85 a gallon in the first quarter of 2007, a 48 percent increase.

"The first quarter proved yet again that fuel prices remain one of the biggest threats to our industry and our company, and we also can't ignore the ongoing concerns about the U.S. economy and the potential impact on travel demand. Clearly, it has been a challenging start to 2008, and I want to take this time to again apologize to our customers who were inconvenienced by our recent cancellations and also thank all of our employees who worked tirelessly through difficult weather and maintenance challenges to take care of our customers," said AMR Chairman and CEO Gerard Arpey. "While our first quarter financial results were disappointing, through our hard work in recent years to contain costs and strengthen our balance sheet and liquidity we are better positioned to withstand today's uncertainty. However, we also recognize that we have a lot more hard work ahead of us and that our efforts must be ongoing."

Arpey noted that the company is taking numerous steps to address the challenging circumstances that it faces, including its recent hiring freeze for management and support staff and today's announcements that AMR is making additional reductions to its 2008 capacity plan and is accelerating the replacement of its MD-80 fleet with more efficient Boeing 737-800s.

Source: AMR