AMR posts $166 million loss

<br>DALLAS (AP) _ AMR Corp., parent of American Airlines, said Wednesday it lost $166 million in the first quarter, with higher jet fuel prices accounting for about half that amount. <br><br>AMR's

Wednesday, April 21st 2004, 12:00 am

By: News On 6

DALLAS (AP) _ AMR Corp., parent of American Airlines, said Wednesday it lost $166 million in the first quarter, with higher jet fuel prices accounting for about half that amount.

AMR's loss, $1.03 per share, was far smaller than the $1.04 billion loss, $6.68 per share, that the company posted a year earlier.

Analysts had expected a loss of $1.04 per share, according to a survey by Thomson First Call.

Revenue rose 9.5 percent to $4.51 billion from $4.12 billion.

AMR shares were up 23 cents, to $12.26, in midday trading on the New York Stock Exchange.

American is packing its planes more fully but is still having difficulty raising fares. As a result, much of its improvement is due to cost-cutting. Thousands of layoffs in the past year and lower salaries for remaining employees helped the airline cut first-quarter expenses by 10.4 percent to $4.47 billion.

Fuel costs, however, rose 10.8 percent, jumping by $79 million to $808 million in the quarter.

Each 1-cent per gallon rise in fuel prices costs the world's biggest carrier more than $30 million, and company planners have already raised their price estimates 12 cents per gallon since Jan. 1.

On Tuesday, American raised a fuel surcharge on tickets from $20 to $30 for most round trips in the United States and Canada.

American faces smaller problems too. Last week, an arbitrator ordered the airline to pay about $23 million to its pilots' union to settle a contract dispute.

The news from the Fort Worth-based airline isn't all bad, however.

Chief executive Gerard Arpey said last week that traffic in the second half of March was stronger than expected and advance bookings for late spring and early summer looked promising, raising hopes for better results in the April-June quarter.

Analysts expect AMR to earn money in the seasonally stronger second and third quarters, nearly offsetting losses the rest of the year.

American also announced a deal this week under which Rolls Royce PLC agreed to send $900 million to $1.6 billion in work to a Fort Worth facility owned by the engine maker and American.