Updated from 10:02 a.m. EDTAMR ( AMR), the parent company of American Airlines, reported a profit for the second quarter, just the second time in the last 22 quarters it has been in the black without the benefit of extraordinary items. The Fort Worth, Texas, airline holding company earned $291 million, or $1.14 a share, for the second quarter, matching estimates. AMR had a profit of $58 million and 30 cents a share in the year-ago period. Revenue of $5.98 billion increased 12.5% from last year. Meanwhile, expenses for wages, salaries and benefits were $1.68 billion, up just 0.5 % as the number of employees fell by 2,000 to 86,500. On average, analysts surveyed by Thomson Financial were looking for revenue of $5.93 billion from the world's biggest airline. Shares of AMR closed Wednesday at $24.62, up 1.1 %. "Given where we've been the past five or six years, you've got to feel reasonably good that you made $291 million in the quarter," said CEO Gerard Arpey on a conference call. "But when you compare
Kelly also said Southwest is taking delivery of about three dozen planes a year in 2006 and 2007 and would like to get more. "Based on the work we have done to this point, we have not convinced ourselves that we should go out and replace MD80s," Arpey said. He added that volatile fuel costs make future planning difficult. Additionally, whereas Kelly said Southwest has noted that rising fares are tempering demand in select markets, Arpey said American hasn't seen any slowdown in passenger interest. In the second quarter, AMR paid $374 million more for fuel than it would have at the prices prevailing a year ago. American's systemwide load factor, or the percentage of seats filled, hit a record of 82.6%. Revenue per available seat mile rose 11.7% to 10.58 cents. Meanwhile, cost per available seat mile excluding fuel and regional affiliate expenses was up 1.4% to 7.41 cents. AMR ended the second quarter with $5.7 billion in cash and short-term investments, including a restricted balance of $525 million. "For the foreseeable future we are going to want to maintain a sizable cash balance," Horton said. "We'll be seeking to improve the leverage ratios of the company in the coming months. That's what we'll be focusing on."