AMR Posts Loss for Q3

October 20 00:00 2011

New York, October 20 (RainbowNewsLine.com) – American Airlines’ parent company AMR Corp (NYSE: MAR) has reported a loss for Q3. Chairman and Chief Executive Gerard Arpey defending the company’s slow-moving turnaround plan Wednesday said in a conference call with analysts that AMR “can and will become a profitable company again.”

Mr. Arpey said that its total labor bill is $800 million a year higher as a result of avoiding Chapter 11, and this factor is the company’s main disadvantage to rivals that have reduced their expenses over the years through stays in bankruptcy-court protection. He said his priority is to achieve “cost-competitive and efficient” labor contracts in order to fight the above disadvantage.

Mr. Arpey further stated that AMR will be in a better position to benefit from a turnaround program introduced in 2009, with new labor agreements that boost productivity and set a lower-cost model for new hires at the company. The program also includes building up market presence in the five major U.S. cities, forging joint ventures over the Atlantic and Pacific with foreign carriers, and ordering a massive fleet of new single-aisle airplanes.

The Fort Worth, Texas, company is the third largest U.S. airline by traffic but it is the financially weakest of the big carriers. Since 2008, it has incurred $5 billion in losses and is all set to post its fourth consecutive annual loss in 2011. Its stock has fallen in recent weeks to $1.75, the lowest level since 2003, when it was a candidate for bankruptcy-court protection. In early 2007, its stock peaked at $40.

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