Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
AMR Reports 2nd Quarter Financials  
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Posted (4 years 9 months 1 week 2 days 19 hours ago) and read 4169 times:

AMR Corporation Reports a Second Quarter 2009 Net Loss of $390 Million as Ongoing Weakness in Economy Hurt Demand and Revenue
EXCLUDING SPECIAL ITEMS, SECOND QUARTER LOSS WAS $319 MILLION, WHICH COMPARES TO A LOSS OF $298 MILLION AT Macedonian Airlines (Greece)">IN SECOND QUARTER 2008 H1N1 REVENUE IMPACT ESTIMATED AT $50 MILLION TO $80 MILLION AT Macedonian Airlines (Greece)">IN SECOND QUARTER DESPITE CHALLENGES, COMPANY CONTINUES ITS FOCUS ON IMPROVEMENTS AT Macedonian Airlines (Greece)">IN AREAS WITHIN ITS CONTROL: -- Added $66 million in liquidity through aircraft sale-leaseback transaction -- Announced plans to take eight additional Boeing 737-800s for narrowbody replacement, increasing 737 deliveries to 84 for 2009 through 2011 -- Completed $520 million public offering that adds liquidity; Company now has committed financing expected to cover all firm 737 orders through 2011 -- Increased planned 2009 capacity reductions to 7.5 percent versus 2008 -- Continued to improve customer dependability metrics

Notables:
AMR has burned $2B in cash over the past year; has $3B in unrestricted cash and $3.7B in unencumbered assets (an indication of how easily they can receive DIP financing to go through BK).

RASM was down more than 20% in every international region, including Latin America where capacity was down the most of other AA int'l regions.

18 replies: All unread, jump to last
 
User currently offlineIFlyATA From United States of America, joined Dec 2005, 238 posts, RR: 3
Reply 1, posted (4 years 9 months 1 week 2 days 19 hours ago) and read 4130 times:

Not as bad as could be...they beat analyst expectations by 15 cents a share (excluding special items). Good to see the 737 financing in place till 2011 too.


ATA - an honestly different airline.
User currently offlineCrAAzy From United States of America, joined Jan 2008, 734 posts, RR: 0
Reply 2, posted (4 years 9 months 1 week 2 days 18 hours ago) and read 4026 times:
Support Airliners.net - become a First Class Member!

Disappointing to see that they lost more than Macedonian Airlines, but I'm glad they are continuing their efforts to improve Macedonian's performance measures  biggrin 

User currently offlineLightsaber From United States of America, joined Jan 2005, 12420 posts, RR: 100
Reply 3, posted (4 years 9 months 1 week 2 days 17 hours ago) and read 3854 times:
Support Airliners.net - become a First Class Member!



Quoting CrAAzy (Reply 2):
Disappointing to see that they lost more than Macedonian Airlines, but I'm glad they are continuing their efforts to improve Macedonian's performance measures

 rotfl  Yea, I didn't get that part either. Isn't that a fast expansion of Macedonian Airlines? Exactly why would a small airline like that even be in an AA press release? Sorry to hear they were hit so hard by H1N1.  Wink

Quoting WorldTraveler (Thread starter):
AMR has burned $2B in cash over the past year; has $3B in unrestricted cash and $3.7B in unencumbered assets (an indication of how easily they can receive DIP financing to go through BK).

Huge factors. Far more cash than UA or US. But they must reduce the burn rate.

Quoting WorldTraveler (Thread starter):
take eight additional Boeing 737-800s for narrowbody
replacement, increasing 737 deliveries to 84 for 2009 through 2011

This will help. Its time for the Maddogs to go. They are in need of maintenance that is more expensive than the 'down payment' on a 738. Once the 738 is in service, the per-flight costs are not only lower than the MD-80, but they lift more and there are more missions open to them.

Its sad that the industry is currently looking to see who will be the last man standing.

Lightsaber



I've posted how many times?!?
User currently offlineFlyibaby From United States of America, joined Aug 2004, 1016 posts, RR: 6
Reply 4, posted (4 years 9 months 1 week 2 days 16 hours ago) and read 3723 times:

I'm confused - so I'm sorry if I have missed a previous thread - but does AA have any investment or something in Macedonian Airlines - or was it just used as a comparison?

User currently offlineMir From United States of America, joined Jan 2004, 21098 posts, RR: 56
Reply 5, posted (4 years 9 months 1 week 2 days 16 hours ago) and read 3657 times:



Quoting Flyibaby (Reply 4):
I'm confused - so I'm sorry if I have missed a previous thread - but does AA have any investment or something in Macedonian Airlines - or was it just used as a comparison?

If you're asking about this:

Quoting WorldTraveler (Thread starter):
EXCLUDING SPECIAL ITEMS, SECOND QUARTER LOSS WAS $319 MILLION, WHICH COMPARES TO A LOSS OF $298 MILLION AT Macedonian Airlines (Greece)">IN SECOND QUARTER 2008 H1N1 REVENUE IMPACT ESTIMATED AT $50 MILLION TO $80 MILLION AT Macedonian Airlines (Greece)">IN SECOND QUARTER DESPITE CHALLENGES, COMPANY CONTINUES ITS FOCUS ON IMPROVEMENTS AT Macedonian Airlines (Greece)">IN AREAS WITHIN ITS CONTROL

It's a pesky forum bug. AA and Macedonian have no connection that I know of. But Macedonian's code is AT. So when the forum software sees AT, sometimes it puts "Macedonian Airlines" in there.

-Mir



7 billion, one nation, imagination...it's a beautiful day
User currently offlineFlyibaby From United States of America, joined Aug 2004, 1016 posts, RR: 6
Reply 6, posted (4 years 9 months 1 week 2 days 16 hours ago) and read 3650 times:



Quoting Mir (Reply 5):
It's a pesky forum bug. AA and Macedonian have no connection that I know of. But Macedonian's code is AT. So when the forum software sees AT, sometimes it puts "Macedonian Airlines" in there.

Makes more sense now.


User currently offlineIFlyATA From United States of America, joined Dec 2005, 238 posts, RR: 3
Reply 7, posted (4 years 9 months 1 week 2 days 16 hours ago) and read 3636 times:



Quoting Mir (Reply 5):
But Macedonian's code is AT.

Close, but Macedonian's IATA is IN, AT is Royal Air Maroc.



ATA - an honestly different airline.
User currently offlineMir From United States of America, joined Jan 2004, 21098 posts, RR: 56
Reply 8, posted (4 years 9 months 1 week 2 days 16 hours ago) and read 3619 times:

Quoting IFlyATA (Reply 7):
Close, but Macedonian's IATA is AT Macedonian Airlines (Greece)">IN, AT is Royal Air Maroc.

Which would explain why the tag is always followed by AT Macedonian Airlines (Greece)">IN. Where the AT comes from, I have no idea.   

EDIT: So it appears that if you try to type "in" in capitals, you'll get the Macedonian reference.

-Mir

[Edited 2009-07-15 09:58:39]


7 billion, one nation, imagination...it's a beautiful day
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32177 posts, RR: 72
Reply 9, posted (4 years 9 months 1 week 2 days 15 hours ago) and read 3448 times:

Quoting WorldTraveler (Thread starter):
including Latin America where capacity was down the most of other AA int'l regions.

Cutting a Caribbean hub operation in half kind of has that effect. AA remains pretty much flat to South America; and as of now is increasing capacity this winter based on aircraft upgauges added this past weekend.

[Edited 2009-07-15 11:07:26]


a.
User currently offlineA388 From Netherlands Antilles, joined May 2001, 9567 posts, RR: 11
Reply 10, posted (4 years 9 months 1 week 2 days 14 hours ago) and read 3339 times:



Quoting MAH4546 (Reply 9):
AA remains pretty much flat to South America; and as of now is increasing capacity this winter

That sounds correct when I look at AA's second daily flight to CUR starting November.

A388


User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 11, posted (4 years 9 months 1 week 2 days 13 hours ago) and read 3266 times:



Quoting MAH4546 (Reply 9):

Quoting WorldTraveler (Thread starter):
including Latin America where capacity was down the most of other AA int'l regions.

Cutting a Caribbean hub operation in half kind of has that effect.

AA didn't cut anywhere close to half of its Caribbean capacity. Not sure if you are talking about the SJU hub but SJU is not usually considered Latin - the spokes elsewhere in the Caribbean are.
and given the economy, leisure destinations are being harder hit. But the fact still remains that AA reduced capacity in Latin America more than in any other region and yet the RASM decline was still more than 20%.
As other carriers report their RASM by region, it will be apparent that there is weakness at those carriers in other regions as well. The point is not to single out any carrier or region as being "defective" or "unable to adapt" but to recognize that there are real difficulties facing every region for every airline; the magnitude may change but to pretend that all is well anywhere is not at all reality. AMR simply started the process of confirming that and others will validate it going forward.


User currently offlineUnited1 From United States of America, joined Oct 2003, 5815 posts, RR: 9
Reply 12, posted (4 years 9 months 1 week 2 days 13 hours ago) and read 3261 times:



Quoting Lightsaber (Reply 3):
Quoting WorldTraveler (Thread starter):
AMR has burned $2B in cash over the past year; has $3B in unrestricted cash and $3.7B in unencumbered assets (an indication of how easily they can receive DIP financing to go through BK).

Huge factors. Far more cash than UA or US. But they must reduce the burn rate

Actually AA is slightly worse off then UA is right now in terms of cash. AA has around $340 Million more in unrestricted cash then UA has but when you take a look at their cash position as a percentage of revenue they are a little worse off.

Liquidity/Projected 2009 Revenue
CO 2650M 13000M 20.3%
DL 4500M 28000M 16.1% (excludes $500 Million line of credit)
UA 2500M 16000M 15.7%
AA 2840M 20000M 14.2%
US 1400M 11000M 12.7%

Decent results from AA and it was great to see them beat wall streets expectations, that's one of the reasons why airline stocks are up today.



Semper Fi - PowerPoint makes us stupid.
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32177 posts, RR: 72
Reply 13, posted (4 years 9 months 1 week 2 days 13 hours ago) and read 3148 times:



Quoting WorldTraveler (Reply 11):
Not sure if you are talking about the SJU hub but SJU is not usually considered Latin - the spokes elsewhere in the Caribbean are.

SJU is not Latin, but the spokes, like you say, are, and they cut a lot. The Latin numbers include Caribbean and Mexico, both where AA cut a lot of capacity in the past quarter, not only from SJU, but also from the mainland, albeit all Mexico capacity has been restored.

The fact is this: I'm not talking about performance or revenue or anything like that, simply capacity. AA's capacity to South America remains consistent, and AA will be reallocating capacity to the LatAm region this winter, somewhat offset by the A300 retirement, but an overall increase in a significant amount of markets. That is all. Its difficult for you to swallow, for whatever reason.



a.
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 14, posted (4 years 9 months 1 week 2 days 12 hours ago) and read 3032 times:



Quoting MAH4546 (Reply 13):
AA will be reallocating capacity to the LatAm region this winter

I'm not sure what your point is in trying to continue to hammer the point, but we get it.

It's also perfectly rational for a US carrier to move capacity from the northern Hemisphere to Latin America during the off-peak season.

The amount of capacity that AA had beyond SJU to Latin America was negligible as a percentage of their total Latin network, esp. since most of the flights are very short and many were being flown by regional carriers.

Because airlines move capacity around doesn't mean they are making money - which I THINK is what you are trying to argue. The fact that AA's RASM in Latin America dropped 20% despite a nearly 6% cut in capacity argues that there are indeed plenty of places in S. America - not just the Caribbean that are weak.

We will all be waiting when you have data to show us that AA is generating comparable revenues to S. America. What we continue to hear from you is that everything is doing just fine and yet one statistic after another argues that there are just as many cracks in AA's S. American network as in other regions of the world. The only difference is that AA is making the strategic decision not to cut capacity in S. America to the degree other carriers because AA is the dominant carrier and stands to pick up traffic whenever another carrier cuts capacity.


User currently offlineCommavia From United States of America, joined Apr 2005, 11121 posts, RR: 62
Reply 15, posted (4 years 9 months 1 week 2 days 10 hours ago) and read 2908 times:

All in all, this was about as good as it good have been for AMR. Their labor costs continue to hurt them, but that was offset somewhat by the dramatically lower fuel costs, and the fact that AMR - which has never filed for bankruptcy - is still enjoying broader access to capital markets than several of its peers.

AMR has billions of dollars more of liquid cash, plus billions beyond that of unencumbered or soon-to-be-unencumbered assets that could be used to generate more financing. And that's all assuming that AMR won't be able to get any additional non-asset-backed securities or credit facilities, which I'm not sure will be the case.

Beyond all that, and most importantly, AMR continues to generate positive cash flow, which is excellent. For Q2, AMR generated $479M in positive cash flow from operations. That's a very positive sign. As long as they can maintain positive cash flow, or at least contain the downside of negative cash flow, they should be able to sustain into the fall and winter (hopefully).

Bottom line: as comments from Jamie Baker of JPMorgan today indicate, things aren't look quite as bad for AMR as some people (including some on A.net, cough, cough) might think:

"With liquidity issues nudging oil and demand from the spotlight, fundamentals at AMR (including guidance) were largely unremarkable.

"However, with $3.7 billion in unencumbered assets and a reassuring (if short-lived) credit card processing modification, we continue to view AMR's liquidity-raising takeoff roll as just beginning, whereas UAUA & LCC [UAL and US Airways Group] are viewed as considerably further down their respective runways with rapidly declining room for maneuverability.

"Put differently, we continue to believe Chapter 11 can be averted at AMR."
(Emphasis is mine.)


User currently offlineOA412 From United States of America, joined Dec 2000, 5225 posts, RR: 25
Reply 16, posted (4 years 9 months 1 week 2 days 10 hours ago) and read 2875 times:

I think the biggest plus here is that the gap between this year's loss and last year's was not all the wide.


Hughes Airwest - Top Banana In The West
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32177 posts, RR: 72
Reply 17, posted (4 years 9 months 1 week 2 days 10 hours ago) and read 2860 times:



Quoting WorldTraveler (Reply 14):
Because airlines move capacity around doesn't mean they are making money - which I THINK is what you are trying to argue.

No, its not.

As always, you try to manipulate statement I and others make and turn them around into something they are not.

I was talking about capacity and nothing else.

Everybody is hurting, although South America traffic, outside of Brazil, remains quite strong right now in terms of volume.



a.
User currently offlineCkfred From United States of America, joined Apr 2001, 5067 posts, RR: 1
Reply 18, posted (4 years 9 months 1 week 2 days 4 hours ago) and read 2033 times:

I was watching Ron Allen, former CEO of DL, on CNBC this morning. He believes that until the economy turns around, airlines are going to struggle. They don't have pricing power.

Businesses have reduced travel, and vacationers aren't flying as much.

And an airline can only cut capacity so much, before it becomes counterproductive. If you cut too many flights and routes, than those who are willing to fly can't get where they want to go, when they want to.


Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
US Airways Reports 2nd Quarter Net Income $34M posted Tue Jul 27 2004 15:46:42 by A330323X
Boeing Reports 2nd Quarter Loss posted Thu Jul 24 2003 18:50:05 by Danny
AMR In The Black 2nd Quarter In Row! posted Wed Oct 18 2006 17:27:08 by AAgent
Airtran Reports Profit For 2nd Quarter posted Fri Jul 28 2006 14:48:43 by UGA777
YUL Vs YYC: 2nd Quarter Numbers Are In! posted Wed Aug 6 2008 23:04:28 by Thenoflyzone
Ryanair Reports Last Quarter Loss... posted Tue Jun 3 2008 00:36:11 by Beaucaire
Xjet Posts 2nd Quarter Loss posted Wed Aug 8 2007 16:41:14 by XJET
2nd Quarter Earnings - Who's Winning? posted Tue Jul 24 2007 21:52:03 by Bistro1200
CO 2nd Quarter Results posted Thu Jul 19 2007 14:13:28 by IAHFLYR
Embraer 2nd Quarter Delivery List posted Sat Jul 14 2007 13:23:50 by Andy170