American Airlines workers may see some profit-sharing payments next year if the airline continues to post profits in 2013, American chief executive Tom Horton said on Monday.
"While the year isn’t over, and profit sharing is based on full-year results, I’m optimistic that in March 2014 we’ll be able to make profit sharing payments for the first time in many years," Horton said in a letter to employees.
American Airlines' parent company, AMR Corp., reported a $71 million profit in August, according to a court document filed on Monday.
Excluding reorganization fees and one-time accounting items, the Fort Worth-based carrier posted a monthly profit of $165 million. The financial disclosure is part of the monthly operating reports AMR is required to file with the bankruptcy court.
The company said it spent $27 million on aircraft financing renegotiations and rejections and $9 million on professional fees during the month. It also spent $4 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 $1.8 billion with its regional affiliates, including American Eagle, bringing in $263 million in revenues. Total revenues for the month were $2.34 billion.
The company ended the month with $643 million in cash and $5.5 billion in short-term investments for atotal of about $6.1 billion on hand. That number does not include $935 million in restricted cash.
Horton added that the carrier is still open to a possible settlement with the U.S. Department of Justice related to the antitrust suit the government filed in August to stop American's merger with US Airways. A trial is scheduled for November 25 in federal court in Washington D.C.
Keep reading for the full letter from Horton.
Dear American Team:
Today we reported our financial results for August, which, like our recent operating performance, were outstanding. We produced revenues of $2.34 billion for the month, up 7 percent from last year, making it our highest August revenue total ever. And this helped drive our earnings of $165 million, also a record for the month of August (excluding reorganization and special items).
This continuing string of record-setting results is testament to the hard work of the entire American team. So I’m especially pleased to report that the August results included an additional $50 million set aside for an expected profit sharing payout for 2013. As you probably know, our current labor agreements include profit sharing for eligible employees and we have similar profit sharing plans in place for our agents, representatives, planners, support staff and some management employees. While the year isn’t over, and profit sharing is based on full-year results, I’m optimistic that in March 2014 we’ll be able to make profit sharing payments for the first time in many years.
We are building a strong, competitive and profitable new American which will create more opportunity for our people. In fact, later today we’ll share details of our plans to hire 1,500 new pilots over the next five years. We have offered recall to all of our furloughed pilots and will begin the new recruiting later this fall. This is in addition to the hiring and training underway for 1,500 new flight attendants, and the more than 1,200 agents and representatives who have joined our team this year.
We are making good progress on the merger front, as we continue to prepare a strong case for the trial in November and remain open to discussions with the Justice Department regarding a settlement on appropriate terms. I will keep you updated on the merger as we go. In the meantime, congratulations and thanks for another great month. Let’s keep the focus on our customers and keep the momentum building.
Thanks for all you do!