AMR, Hit by High Fuel Costs, Posts Loss

American Airlines parent AMR Corp. posted a deeper-than-expected third-quarter loss Wednesday as high fuel prices outweighed fare increases and warned of a significant loss in the final quarter.

But AMR shares bounced higher after the No. 1 U.S. airline also detailed plans to cut more than $500 million in costs in addition to the more than $700 million in reductions this year and add $300 million in revenue next year.

“We either need to lower our costs or drive higher revenues or achieve some combination of both,” American Chief Executive Gerard Arpey said in a conference call in which the airline disclosed that it expected fuel costs to rise by $1.1 billion, or 24%, in the fourth quarter.

AMR reported a third-quarter net loss of $153 million, or 93 cents a share, compared with a loss of $214 million, or $1.33, a year earlier. The Fort Worth-based company said sales in the period increased 15% to $5.49 billion.

The loss for what is typically one of the industry’s strongest periods followed a $58-million profit in the second quarter.

Stripping out one-time items, AMR’s third-quarter loss was 58 cents a share, worse than the average loss forecast of 51 cents among analysts polled by Reuters Estimates.

Still, AMR shares gained 40 cents, or 3.3%, $12.40.

Fare increases failed to keep up with high fuel prices, which added $204 million to American’s costs in the third quarter.

AMR and Continental Airlines Inc., which reported results Tuesday, said they expected significant losses in the fourth quarter, always one of the airlines’ weakest periods, unless fuel prices come down.