DALLAS -- (
) -- Bankrupt
kicked off the airline earnings season on Wednesday, reporting a $110 million net profit on the strength of industry leading unit revenue growth, while the impact of bankruptcy cuts began to whittle away at the airline's costs.
The $110 million net profit figure excludes charges for reorganization and other special items. With those charges, the carrier had a net loss of $238 million. The charges include $137 million for reorganization and $211 million for additional items, primarily employee severance costs.
In the same quarter a year earlier, AMR incurred a net loss of $162 million, excluding items.
Third-quarter revenue rose 0.8% to $6.4 billion on 2.3% less capacity. Consolidated passenger revenue per available seat mile grew 4.3%, while mainline PRASM grew 4.5%. Third quarter load factor was 85.5%, a record for any quarter in the carrier's history.
"These results were driven by the best unit revenue growth in the industry in each month of the quarter, and by record load factor, as we continue to make progress in our restructuring for a successful future," said CEO Tom Horton, in a prepared statement.
On the cost side, operating expenses excluding special charges declined 2.7% to $6.2 billion, enabling operating income of $262 million and a margin of 4.1%.
"As our restructuring efforts move forward, we will continue to realize increasingly greater cost savings in the coming quarters, and we are on track to achieve our targeted savings," said Chief Financial Officer Bella Goren. The financial impact of increased third-quarter cancellations and delays was not material, the carrier said.
By region, international PRASM grew 5.3%, while domestic PRASM grew 3.8% with gains in all five AMR hubs. Pacific PRASM grew 15.9%, driven by increased demand for premium cabins and higher revenue from Asia point-of-sale. Latin America grew 4%. The trans-Atlantic grew 2.9%, despite slower sales around the summer Olympics and Europe's weak economies.
"Strong yield and record load factors generated unit revenue growth that topped the industry in each of the three months, continuing a trend of outperforming the industry that we've seen throughout the year," said Virasb Vahidi, chief commercial officer.
The carrier ended the quarter with $5.1 billion in cash and short-term investments, compared with $4.8 billion at the same time a year earlier.
During the quarter, American took delivery of seven Boeing 737-800s, bringing the year's delivery total to 19 aircraft, with nine more scheduled to be delivered in the fourth quarter. Delivery of 59 new aircraft is scheduled for 2013. Capacity is expected to up less than half a percent in the fourth quarter.
-- Written by Ted Reed in Charlotte, N.C.
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