DALLAS -- (
) -- Eleven months into its bankruptcy,
, the parent of American Airlines, is consistently producing positive financial results and is picking up tailwinds from bankruptcy induced cost-cutting, fleet renewal and turnover in its flight attendant ranks.
"Our financial results are impressive given where we are in the (bankruptcy) process, and the momentum that has been built in the company goes far beyond that," said Chief Financial Officer Bella Goren, in an interview Wednesday following the release of AMR's third-quarter results.
American has largely based its battle against a merger with
on the argument that it can restructure successfully on its own, and third-quarter numbers clearly show that is occurring. Nevertheless, most analysts believe a merger remains likely, either with or without American's backing.
In the third quarter, excluding items, American reported a net profit of $110 million. Including one-time charges related to the bankruptcy reorganization and other special items, the carrier had a net loss of $238 million.
Perhaps the most significant number, Goren said, is that the carrier is closing the net margin gap with its peers, reporting net margin of 1.7% for the quarter, up from negative 2.5% in the same quarter a year earlier.
"The majors are projecting a pretax margin decline versus a year ago of about a half percent," she said. "But we saw an improvement of over 4 points."
American's improvement is being fed by industry-leading unit revenue gains. For the quarter, the carrier reported that passenger revenue per available seat mile grew 4.3%. In September, American PRASM grew 4%, leading network peers for the sixth consecutive month, as
(DAL - Get Report)
PRASM grew by half a percent,
was flat and
(UAL - Get Report)
reported a decline of 2.5% to 3%.
As revenue grew, costs fell. American said operating expenses excluding special charges declined 2.7% to $6.2 billion.
"We still are expecting a lot more," Goren said. "A lot of the restructuring savings and revenue are yet to come," since the impact of mid-September bankruptcy contract revisions isn't reflected in the third-quarter numbers. However, the company is already benefitting from reductions in aircraft rental charges, interest payments and management and support staff, she said.