AMR Posts Big Loss, Sees More To Come

The parent of American Airlines says it sees signs of improvement in the travel market.
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AMR

(AMR)

, the parent of American Airlines, lost more than half a billion dollars in the first quarter and said it expects to lose money again in the second quarter.

The airline, which has been struggling with reduced air travel and higher costs in the wake of the Sept. 11 attacks, said it lost $548 million, or $3.53 a share, before a charge in the latest quarter. The average estimate of analysts surveyed by First Call was for a loss of $3.55 a share. First-quarter operating revenues fell to $4.14 billion from $4.76 billion a year earlier.

"There is no question that our business overall is improving, and there are a number of particularly encouraging signs with regard to our day-to-day operations,'' said Don Carty, AMR's chairman and chief executive. "But the facts are that business travel, which historically constitutes a major portion of our business, is not rebounding the way leisure travel is, and average fares are down because of heavy discounting."

The company also cited rising labor, security and insurance costs, although the profit statement showed total operating expenses rose only 2% to $4.87 billion in the quarter from a year ago.

The shares were recently down 12 cents, or 0.5%, to $24.10.