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August 26, 2013

AMR posts $292 million profit in July

American Airlines' parent company, AMR Corp., reported a $292 million profit in July, according to a court document filed on Monday.

Excluding $57 million in reorganization fees, the Fort Worth-based carrier posted a monthly operating profit of $349 million. The financial disclosure is part of the monthly operating reports AMR is required to file with the bankruptcy court.

"We are completing one of the most successful turnarounds in aviation history," AMR chief executive Tom Horton said in a letter to employees. "We are building a strong, competitive and profitable new American poised to lead again."

The company said it spent $28 million on aircraft financing renegotiations and rejections and $27 million on professional fees during the month. It also spent $2 million on "other" reorganization items which are not detailed in the report.

AMR also said that its mainline carrier, American Airlines, had passenger revenues of $1.9 billion with its regional affiliates, including American Eagle, bringing in $270 million in revenues. Total revenues for the month were $2.48 billion.

The company ended the month with $611 million in cash and $5.2 billion in short-term investments for a total of about $5.8 billion on hand. That number does not include $933 million in restricted cash.

Keep reading for the full letter from Horton.

-Andrea Ahles

Dear American Team,

Over the past twenty months, we’ve been working through a difficult but very successful restructuring. Along the way, there were new routes to launch, products to introduce and dozens of new aircraft to bring into the system. There were tough days and good days, and there were plenty of days when our destination on this journey seemed very far away.

Today is a very good day. This morning we reported our financial results for July and here's the headline: we are completing one of the most successful turnarounds in aviation history. We are building a strong, competitive and profitable new American poised to lead again.

Thanks to your hard work, American earned a net profit of $352 million in July, excluding reorganization and special items – a record for any month in our history. In fact, our July profit alone nearly equals the $357 million record profit we reported for the entire second quarter. Our consolidated, passenger and unit revenues also set all-time highs for any month. That’s extraordinary – congratulations!

In addition to our strong financial performance, momentum is building throughout American. We're growing our formidable international network with both new routes and expanded partnerships. This month we announced expansion of our partnership with LATAM to increase our network connectivity in Brazil and Colombia, extending our lead in the increasingly important Latin American market.

Our industry-leading fleet renewal is accelerating. We reached a major milestone in July when we welcomed our first Airbus A319 at the Airbus factory in Hamburg – the first of 260 planned Airbus aircraft on the way. The A319 offers better fuel efficiency with state of the art interiors and inflight entertainment. It’s a great aircraft for our customers.

We launched our first service with the 76-seat Embraer E-175. This large regional aircraft is a great product that allows us to better match supply and demand with the right amount of schedule frequency as our competitors do.

And there is more to come. In November we are scheduled to take delivery of our first specially configured Airbus A321T, which will start flying JFK-LAX and JFK-SFO in January 2014.

Best of all, with this progress comes opportunity for our people. We are hiring hundreds of new flight attendants and recalling and training pilots at an accelerating pace.

Finally, and most importantly, we are focused on completing our merger with US Airways.

You probably saw last week’s news that we are seeking a November trial date, and the American team is standing strong together with US Airways to get this merger closed. I appreciate that so many of you have asked how you can help, and in the coming days we’ll be sharing ways you can get involved to express your support. We’re ready to make our case in court for the merger's significant benefits to all of our stakeholders and the communities we serve.

As I travel around the system, I hear from lots of you and lots of our customers. What's clear to me is that the people of American are doing a great job for our customers every day and the results speak for themselves.

In the coming weeks, I look forward to sharing with you the latest developments and more news about the new American moving ahead.

Thanks for all you do!

Tom

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