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AMR's Red Ink Tied to Currency Exchange Loss

January 21, 1988|ROBERT E. DALLOS | Times Staff Writer

NEW YORK — AMR Corp., parent company of American Airlines, on Wednesday reported a preliminary loss of $805,000 in the fourth quarter of 1987, in contrast with net earnings of $6.6 million in the same period of 1986.

For all of last year, AMR reported preliminary net profits of $198.4 million, compared to $279.1 million for 1986.

AMR Chairman and President Robert L. Crandall said three major factors caused the big difference in results between the fourth quarters of 1987 and 1986. He said these factors "masked our progress toward lower costs and improved profitability."

Most important, AMR suffered a $23.1-million unrealized foreign currency exchange loss in the fourth quarter of last year, Crandall said. It was related to debt denominated in Japanese yen.

Fourth-quarter profit was also adversely affected by the threat late last month of a strike of flight attendants. Members of the Assn. of Professional Flight Attendants had threatened to walk off their jobs for two days beginning Dec. 23. Agreement was reached the night before the strike was scheduled to start, but the publicity caused many Christmas travelers to switch to other carriers.

Additionally, Crandall said, American experienced "extraordinarily bad weather" at a number of key cities on its system during the period.

Operating revenue for all 1987 rose 19.6% to $7.2 billion from $6 billion in 1986, resulting from a 6.5% increase in yield (the average amount of revenue per passenger mile), and a 16.4% increase in revenue passenger miles.

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