AMR Loses $390 Million

Ongoing weakness in travel demand resulted in a 21% decline in revenue and a second-quarter loss for American Airlines parent AMR(AMR Quote), but the carrier beat Wall Street estimates.

Excluding special items, the loss was $319 million or $1.14 a share. Analysts surveyed by Thomson Reuters had estimated $1.28 a share. Revenue was $4.9 billion, in line with estimates. During the same period a year earlier, excluding items, American lost $298 million or $1.19 a share.

Including the impact of approximately $70 million related to aircraft sales and groundings, the second-quarter 2009 loss was $390 million or $1.39 a share.

"With ongoing global economic weakness and the resulting effect on travel demand, revenues are down sharply from a year ago," said CEO Gerard Arpey, in a prepared statement. "The spot price of oil, while much lower than this time last year, has risen since early this year and remains volatile."

American said full-year 2009 capacity will decline by 7.5%, compared with full-year 2008, a reduction of about one percentage point more than previously forecast.

The revenue decline reflected a 7.6% mainline capacity reduction as well as a $50 million to $80 million decline due to the impact of the H1N1 virus. Additionally, cargo revenue fell by 42.6% or $99 million, reflecting global economic weakness. Fee revenue increased by 7.4% to $565 million.

Mainline passenger revenue per available seat mile declined by 16%. Yield fell by 15.4%, reflecting aggressive industrywide pricing and reduced premium traffic.