American Airlines Posts $291 Million Profit for Q2

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Jul19

American Airlines Posts $291 Million Profit for Q2

Rob Willers

Know More: American Airlines 2.0, American Airlines

American Airlines reported today that their profits for the 2nd Quarter showed a five fold increase due to stronger demand and cost reductions at the airline. American Airlines filled 83 per cent of their seats in the second quarter giving them a strong profit of $291 million dollars, up over last year's profit of $58 million. It was only the second time American has shown a quarterly profit in the last 22 quarters without the help of special one-time events.
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"Our performance indicates very clearly that we are on the right track, but also demonstrates -- just as clearly -- that we have more work to do to return our company to financial health," AMR Chairman and Chief Executive Gerard Arpey said in a statement.

The airline’s revenue increased 12.5 percent to $6 billion. American is the largest carrier at Lambert Field in St. Louis.

High fuel costs remain a huge obstacle for American and the rest of the airline industry. American, for example, spent more on fuel, $1.71 billion, in the quarter than the $1.68 billion it paid employees in wages, salaries and benefits. Salary and benefit costs usually rank as the highest cost for an airline.

Arpey said American not only has to battle rising fuel costs, but continuing competition from bankrupt carriers that use the Chapter 11 process to tear up labor contracts and ditch pension obligations.

St. Louis Post Dispatch (STLToday)

American Airlines (AMR) was up in mid-day trading to $24.67 a share (up $0.31).

related entries

American Airlines Redesigns International Business Class Aug 8, 2006
AMR Corp. Gives CEO 23% Raise; Angers Pilots Aug 4, 2006
AMR Corp. May Freeze Pension Plan Aug 1, 2006
AMR. Corp (American Airlines) Set to Begin Talks with Pilots Jul 24, 2006
American Airlines Wants More Asian Destinations Jul 20, 2006

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