Wed, Jan 17, 2007
American Airlines Parent Beats Out Negative 4Q Predictions
AMR published its
earnings reports Wednesday, bringing continuing good news for the
air carrier industry. The world's largest airline showed a profit
for 2006 for the first time since the terrorist attacks of
9/11.
Additionally, despite predictions to the contrary from Wall
Street, the airline eked out a narrow profit of $17 million for the
fourth quarter of last year as well. That compares to a $600
million loss for previous year's last quarter.
This is also the third profitable quarter in a row for the
airline, another milestone not seen since 2000.
In a prepared statement, the airline's CEO Gerard Arpey said,
"By producing a fourth-quarter and full-year profit for the first
time since 2000, the people of American Airlines made 2006 a proud
milestone in our ongoing turnaround. We have a lot of work left to
do, but the track we are on today is the right track to position
our company for long-term success."
Helping the airline to stay in the green for the final quarter
was a break in fuel costs. That allowed AMR cut overall costs
sharply enough to squeeze a profit from revenues of $5.40 billion.
Dropping oil prices allowed the company to cut its fuel costs by
8.5 percent.
The airline reported more passengers in 2006 than 2005, pushing
earnings to $231 million on total revenues of $22.56 billion.
That compares to an $857 million loss for 2005 on revenues of
$20.71 billion.
In what some may view as the other side of the coin, American --
and the industry as a whole -- became more profitable partly on the
strength of 10 industry-wide rate increases. How those rate
increases (especially if the industry continues to dip from the
well) might affect the number of passengers in the future remains
to be seen.
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