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Earnings

4 Airlines Post Quarterly Losses

July 19, 2001|From Bloomberg News

FORT WORTH — AMR Corp.'s American Airlines, UAL Corp.'s United Airlines and two other carriers reported second-quarter losses Wednesday because high-fare business travel tumbled and fuel and labor costs climbed.

AMR, the largest airline company since its acquisition of Trans World Airlines earlier this year, and No. 2 UAL expect losses for the third quarter and 2001 if the U.S. economic slowdown forces companies to limit employee travel through the year. Airlines have responded by lowering fares, eliminating flights and freezing hiring. US Airways Group Inc. and America West Holdings Corp. also had losses.

Fort Worth-based AMR had a loss of $105 million, or 68 cents a share, compared with a profit of $285 million, or $1.75 a share, in the year-ago quarter. Sales rose 11% to $5.58 billion.

The results were in line with the average forecast of a loss of 69 cents from analysts polled by First Call/Thomson Financial.

In addition to the decline in business passengers, AMR said fuel costs rose 49% and labor costs increased 27%.

UAL's second-quarter loss was $292 million, or $5.50, wider than the average forecast of $4.73 a share in a First Call survey of analysts. Sales fell 8.8% to $4.66 billion.

In the year-ago quarter, UAL's profit from operations was $374 million, or $3.19.

US Airways, the sixth-largest U.S. airline, said it lost $24 million, or 36 cents, compared with net income of $80 million, or $1.17, a year ago. Sales rose 3% to $2.49 billion.

The carrier's future is in peril if United Airlines parent UAL doesn't complete its $12.3-billion acquisition of US Airways, executives at US Airways have said.

America West had a loss of $20.3 million, or 60 cents, in the second quarter. First Call forecast that the carrier would lose 73 cents.

Six of the nine largest U.S. airlines had second-quarter losses, analysts estimate. The only major airlines to avoid losses were Continental Airlines Inc., which said Monday that profit fell 73%, and Southwest Airlines Co. and Alaska Air Group Inc., which report results this week.

On the New York Stock Exchange, AMR shares fell 96 cents to close at $35.44, UAL dropped 76 cents to $34.98, US Airways rose 89 cents to $17.61 and America West slipped 9 cents to $10.10.

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