EARNINGS : High Fuel Costs Send AMR Profit Plunging

AMR Corp., the parent of American Airlines, said Wednesday that its fourth-quarter earnings took a nose dive, skidding 66.7% to $38.9 million, largely because of higher fuel costs.

The airline’s dismal fourth quarter dragged down AMR’s earnings for the year. AMR said 1989 profit fell 4.8% to $454.8 million, despite record profits for the first nine months.

Robert L. Crandall, AMR chairman and president, called the airline’s performance very disappointing.

AMR’s shares closed down 50 cents at $56.50 Wednesday on the New York Stock Exchange. Other airline stocks were mixed. UAL Corp., parent of United Airlines, closed down 87.5 cents at $161, and USAir was off 12.5 cents at $30.75. Delta Air Lines gained 12.5 cents, closing at $66.375.

Besides AMR, other airlines are also expected to post profit declines. Last week, for example, Delta warned investors that profits would be lower in its December quarter, largely because of skyrocketing fuel costs.

Most airline analysts don’t expect the first quarter of this year to be much better, despite recent fare increases to cover fuel costs. Some analysts expect the industry to lose $600 million for the first three months of this year.

AMR said fuel prices rose 30% during the fourth quarter, but fares remained steady, squeezing profits. So far this year, American has raised ticket prices 4% and has announced a $6 surcharge on one-way tickets to cover fuel costs.

Despite the lower profits, AMR said revenue grew significantly, thanks to expansions in the Eastern United States and in Europe. The airline’s revenue gained by 9.3% to $2.59 billion in the fourth quarter. Revenue for the year was up 18.8% to $10.48 billion.