American Airlines releases 1st Quarter earnings, while local unions await word on layoffs
Wednesday, April 23rd 2003, 12:00 am
News On 6
American Airlinesâ€™ earnings report for the first quarter came out and it wasn't good news. News on 6 anchor Terry Hood breaks down the numbers.
As many expected, American's earnings took a nosedive last quarter. They're bleeding cash and it doesn't look good. "It could get worse but a billion dollars is a staggering amount." American Airlines earnings report is the latest blow for the world's largest air carrier. The company is reporting a first quarter loss of more than a billion dollars. That's actually better than this time last year.
But American is still losing cash. "A cash flow statement tells no lies this company is losing a lot of cash millions of dollars, millions every day." In fact, Fredrick Russell with Russell Investment Management says American hasn't made a profit since 2000.
And with the airline weighted down with $10-billion of debt, he's not surprised it's now on the brink of bankruptcy. â€œAnd its simple the expenses are too great and the revenues are not great enough that accounting 101." But Chapter 11 isn't the only issue.
While American tries to steer clear of bankruptcy, it's losing ground to other airlines, like discount flyer Southwest, which posted a profit of 24 million dollars this quarter. â€œAmerican, United, and Delta are the walking wounded and they canâ€™t expand easily with the problems they face. A company thatâ€™s making money certainly can." While the numbers aren't good, Fred Russell says itâ€™s the developments with the unions that could push American into bankruptcy.
American has more than 9,700 employees at a Tulsa maintenance plant and more than 250 workers at airports in Tulsa and Oklahoma City.