Bankruptcy is bringing income down at American Airlines Inc. parent AMR Corp., as restructuring costs pushed the company into a $1.7-billion loss for the first quarter.
Without the $1.4-billion bankruptcy burden, AMR said its loss would have been $248 million. At least that’s not quite as bad as its $405-million loss during last year’s first quarter.
Still, the company suffered a net loss of $4.95 a share, compared with the net $436 million, or $1.31 a share, lost last year. AMR filed for Chapter 11 protection in late November.
At least revenue is up, increasing 9.1% to more than $6 billion even as fuel prices rose 17.6% to $3.24 a gallon from $2.76 a gallon a year earlier. That’s pumped up AMR’s fuel bill by $323 million to nearly $2.2 billion.
The company said it modified 158 aircraft leases and rejected eight. It also set aside $45 million to pay for bankruptcy attorneys and other counsel.
But with average fares up 7.4% and 79% of its seats filled, the company reported that revenue for each mile flown by passengers is up 10.3% for the quarter, which ended March 31.
AMR said Wednesday that it will cut 1,200 baggage and cargo jobs at various airports. For the quarter, labor costs relating to its roughly 88,000 employees were nearly $1.8 billion – an increase of $60 million.
As part of its restructuring plan, AMR plans to trim its annual labor spending by nearly $1.3 billion, reducing its workforce by 13,000 jobs while freezing pensions. This week, the company said it will outsource all of its jobs at select airports around the country and in Canada, including at the Ontario and Sacramento airports in California.
Admirals Clubs at the Dulles airport in Washington, D.C., and three other airports will also shut down. AMR will be shuttering its reservations center in Arizona.
AMR said its airlines serve more than 250 airports in more than 50 countries. Its more than 900 planes complete more than 3,300 flights daily.