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Briboy
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Earnings Preview: AMR expected to post 1Q lossBy: The Associated Press | 19 Apr 2010 | 06:19 PM ET Text Size DALLAS - AMR Corp., the parent of American Airlines, is scheduled to report first-quarter results Wednesday. Here's a summary of key developments in the period.
WHAT TO WATCH FOR: Passenger traffic on American Airlines has stabilized but it's hardly any stronger than a year ago, when the country was in a recession. Competitors such as Delta, United and Continental scored bigger gains in traffic during the first quarter.
American was also hit by the February snowstorms that shut down airports on the East Coast for several days, and fuel prices on the spot market have risen nearly one-fifth since early February. It all adds up to another tough quarter for the Texas-based airline.
There were some bright spots in the quarter for American, however. It held on to a longtime alliance with Japan Airlines, fending off a challenge from Delta. And with less capacity, U.S. airlines are expecting full flights and higher ticket prices this summer.
WHY IT MATTERS: American could use money to pay down debt and settle contract negotiations with its labor unions.
The unions are pressuring American to give back some of the wage and benefit cuts that workers accepted in 2003, when the company was on the verge of bankruptcy.
Two of the unions, representing ground workers and flight attendants, have asked federal mediators to declare a stalemate in negotiations. So far, mediators have told both sides to keep negotiating, but if they end the talks it would start a 30-day countdown toward a possible strike.
American executives say they must control labor costs, which they say are among the highest in the airline industry. They say it's too early to end negotiations.
WHAT'S EXPECTED: As of Monday afternoon, analysts surveyed by Thomson Reuters expected AMR to lose $1.31 per share, or about $399.3 million, on sales of $5.1 billion. That wouldn't count one-time gains or costs.
LAST YEAR'S QUARTER: AMR, which also owns the American Eagle regional airline, reported that it would have lost $1.25 per share without counting one-time gains and costs on revenue of $5.06 billion.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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