American Airlines' parent company AMR reports $328-million loss
Rising fuel costs drive firm's biggest shortfall in more than two years. Results don't reflect additional losses due to flight cancellations. Shares rise nearly 10% nonetheless.
With American Airlines hit hard by rising fuel costs, its parent company AMR Inc. lost $328 million in the first quarter, the biggest loss for the nation's largest carrier in more than two years.
The latest financial results for the period ending March 31 did not include the "tens of millions of dollars" that American said it expected in lost revenue and expenses related to last week's cancellation of thousands of flights because of missed aircraft inspections. Those losses will be reflected in second-quarter results.
Still, American shares rose nearly 10% in early trading as the carrier announced it was scaling back growth plans amid signs of slowing demand for air travel. It also agreed to sell its American Beacon Advisors Inc. investment unit for $480 million.
The cutbacks were the latest efforts to rein in costs. The carrier earlier recently froze hiring of managers and support employees.
"Fuel prices remain one of the biggest threats to our industry and our company, and we also can't ignore the ongoing concerns about the U.S. economy and the potential impact on travel demand," Chief Executive Gerard Arpey said in the statement.
Spending on fuel, the airlines largest expense, nearly doubled to $2.1 billion, compared to year-earlier period.
The net loss of $1.32 per share was slightly less than the $1.33 that analysts expected.
peter.pae@latimes.com
