Q4 2010 Earnings Call
January 19, 2011 2:00 pm ET
Chris Ducey - Managing Director of Investor Relations
Tom Horton - CFO, EVP Finance
Gerard Arpey - Chairman and Chief Executive Officer
Bella Goren - Chief Financial Officer and Senior Vice President
Garrett Chase - Barclays Capital
Daniel McKenzie - Hudson Securities Inc.
Jamie Baker - JP Morgan Chase & Co
Glenn Engel - BofA Merrill Lynch
Helane Becker - Dahlman Rose & Company, LLC
Previous Statements by AMR
» AMR Corporation CEO Discusses Q3 2010 Results - Earnings Call Transcript
» AMR Corporation Q2 2010 Earnings Call Transcript
» AMR Corp. Q1 2010 Earnings Call Transcript
Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the AMR Fourth Quarter 2010 Earnings Conference Call. [Operator Instructions] We're very pleased to have on the call with us today, AMR's Chairman and Chief Executive Officer, Gerard Arpey; the President of AMR and American Airlines, Tom Horton; and Senior Vice President and Chief Financial Officer, Bella Goren. And here with their opening remarks is AMR's Managing Director of Investor Relations, Chris Ducey. Please go ahead.
Good afternoon, everyone. Thank you for joining us on today's AMR earnings call. During the call, Gerard Arpey will provide an overview of our performance and outlook, and then Bella Goren will provide the details regarding our earnings for the fourth quarter, along with some perspective on the first quarter and the full year of 2011. After that, we'll be happy to take your questions. In the interest of time, please limit your questions to one with a related follow-up.
Our earnings release earlier today contains highlights of our financial results for the quarter. This release continues to provide additional information regarding entity performance and cost guidance which should assist you in having accurate information about our performance and outlook. In addition, the earnings release contains reconciliations of any non-GAAP financial measurements that we may discuss. This release, along with a webcast of today's call, is available on the Investor Relations section of www.aa.com.
Finally, let me note that many of our comments today, including statements regarding our outlook for revenue and cost, forecasts of capacity, traffic, load factor, fuel costs, fleet plans and statements regarding our plans and expectations, will constitute forward-looking statements. These matters are subject to a number of factors that could cause actual results to differ from our expectations. These factors include changes in economic, business and financial condition, high fuel prices and other factors referred to in our SEC filings, including our 2009 annual report on Form 10-K and our quarterly report for the third quarter of 2010 on Form 10-Q.
And with that, I'll turn the call over to Gerard.
Okay, thank you, Chris. Good afternoon, everyone. As you have seen in our press release this morning, we reported a significant improvement in both our fourth quarter and full year 2010 results compared to 2009. We substantially reduced our net loss for all of 2010 compared to the $1.5 billion loss that we incurred in 2009. This obviously represents an improvement in more than $1 billion versus a year ago. And that in spite of a fuel bill that was merely $850 million higher than it would've been at 2009 prices.
A lot of hard work on the part of everyone at American went into accomplishing this improvement. And while we have a lot more work to do to achieve our goal of sustained profitability, we are optimistic about the trajectory we are on and we believe that the groundwork we laid in 2010 has positioned us well for future success. I want to thank our employees for their hard work and dedication this past year and for their continued efforts in what is shaping up to be a very busy start to 2011.
Bella will walk you through our results in more detail in a few moments. But first, let me just highlight a couple of things. In 2010, we took several major steps to restructure and fortify our domestic network. Today, nearly 98% of our capacity is in one of our five cornerstone markets. We are now stronger in the markets that matter most to our premium and corporate customers: New York, LA, Chicago, Dallas, Fort Worth and Miami, the premier gateway to Latin America. And in 2011 our focus on our cornerstone markets will include a significant expansion of our Los Angeles service starting in April.
Our transatlantic joint business with British Airways and Iberia is now up and running, offering customers better fares, more choices and easier connections. The transatlantic joint business, initially representing approximately $7 billion in combined revenue between the carriers, serves more than 400 destinations in over 100 countries with approximately 5,200 daily departures.
This new relationship is enabling our three companies in oneworld to compete far more effectively with the other global alliances on routes between Europe and North America. In 2011, we look for us to deepen our relationship with VA and Iberia on many fronts, importantly including more coordinated joint flight schedules beginning this spring.
Turning to the Pacific. Last week we announced that we expect our joint business with Japan Airlines to launch on April 1. Our transpacific joint business will initially include 10 nonstop routes across the Pacific. American and JAL will also code-share on a total of 123 routes, and we will continue to expand our code-share whenever that is possible.
In addition, American will begin flying to Tokyo's Haneda Airport nonstop from New York's Kennedy Airport on February 18. As we launch our joint businesses across both the Atlantic and Pacific, we are simultaneously enhancing and expanding our global network of partners, adding quality carriers in the markets that matter most to our customers, including airberlin in Europe, S7 in Russia, and Kingfisher in India. We are also very pleased to welcome our long-time partner Qantas to Dallas Forth Worth with the announcement last week that they plan to start flights to DFW airport in May.