American Air CEO sees "very, very big" 2001 loss
DALLAS (Reuters) - AMR Corp., whose American Airlines is the world's No. 1 carrier, expects a "very, very big loss" for the current quarter and full year after the plunge in air travel since September 11, Chairman and Chief Executive Don Carty said on Tuesday.
In a telephone message to employees of the Fort Worth, Texas-based company, Carty said the airline still had a long way to go to recover from the double impact of a recession and fear of flying caused by the hijack attacks on the United States.
"There are some encouraging signs starting to appear, but we have a long road back, and I hope no one is surprised when we report a very, very big loss for the fourth quarter and the full year," Carty said.
Carty did not specify the loss, which was widely expected as part of a money-losing year for most U.S. carriers who have cut capacity by about 20 percent since September 11 .
In October, AMR posted a record quarterly net loss of $414 million as air travel came almost to a halt after the September 11 attacks.
Wall Street analysts have forecast a mean loss per AMR share of $4.41 this quarter and $8.78 for the full year, as against profits of 34 cents for the year-ago quarter and $4.65 for 2000, according to estimates collected by Thompson/First Call.
Shares of AMR were up 9 cents, or 0.39 percent, at $23.91 in midday trading on the New York Stock Exchange.
Carty said bookings through the holidays and into early January looked promising, but added the airline was still losing money because it was discounting prices on those seats to encourage people to get back in the air.
"But, and this is the paradox, we're still losing millions of dollars every day because, as you know, we have pulled a lot of flying out of our schedule and we're still selling seats at incredibly low prices," he said.
"And we're doing that just to get folks back in the air again and comfortable with flying."
In a bid to cut costs in the face of plunging revenues after September 11, AMR delayed the planned deliveries of 36 of 45 Boeing Co. aircraft from next year to some time past 2003.
The move was part of wide-ranging cuts to the company's 2001 and 2002 capital spending totalling $2.5 billion.
Two of American's jetliners were among the four hijacked for the September attacks that caused the collapse of the World Trade Center and set part of the Pentagon ablaze. One of the four planes crashed in a Pennsylvania field.