BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Wednesday, 16 January, 2002, 11:49 GMT
American Airlines makes record loss
Empty check-ins after the attacks on the US
Air travel plummeted after the US attacks
AMR, the parent of the world's largest carrier American Airlines, lost nearly $800m (560m) in the final three months of 2001, setting the seal on a dismal year for the aviation industry.

Rival Continental Airlines also turned in heavy losses of $220m, not including a $174m federal bailout package. Including both the bailout and other charges, the loss for the quarter was $149m.

Both companies blamed their woes on the sudden collapse in bookings following 11 September, as well as the depressive effect of the generally weak global economy.

Unlike the previous quarter, fuel bills - down nearly a quarter year on year - could not be held responsible, given the collapse in oil prices from late September onwards.

In all, AMR's loss was $798m, or $5.17 a share, slightly more than most analysts were expecting, on sales of $3.8bn, down from $4.86bn in the same period the year before.

Retirements at AMR

The AMR numbers compare with a $47m profit in the same quarter of 2000. The three months to September saw a $414m loss despite help from the US Government's half-billion dollar bailout package.

The company has cut 20,000 jobs since 11 September in a move which few analysts believe could have been avoided even without the additional pressure of the post-attack slump.

In response to the situation, the company said it is retiring its fleet of Boeing 717 100-seater aircraft in June - planes it acquired when it took over struggling rival TWA.

AA will also retire its fleet of ageing Boeing 727 aircraft.

The airline uses a similar-sized aircraft, the Fokker F100, and by "simplifying" its fleet, AMR hopes to save money.

Meanwhile, Continental is hoping to put plans to buy new planes from Boeing on ice.

Rough ride

AMR's chairman and chief executive, Don Carty, said in a statement that the record quarterly loss was caused by lower fares and the decline in business travel in particular.

"Influenced by the lingering effects of last September's attacks, the final three months of 2001 were incredibly difficult," he said.

See also:

23 Dec 01 | Business
US attacks push airlines to the edge
18 Dec 01 | Business
BA-American deal faces obstacles
24 Oct 01 | Business
Massive loss for American Airlines
14 Sep 01 | Business
Airlines bankruptcy warning
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories