AMR reports $220-million profit as it prepares for merger
Cost-cutting measures taken during bankruptcy and lower fuel prices helped the parent company of American Airlines post $220 million in profits for the three-month period that ended in June.
The positive financial report released Thursday marks the best second-quarter performance in the history of AMR Corp. and sets the stage to complete a merger with US Airways this fall.
“The new American is taking off,” said Tom Horton, chairman and chief executive of AMR. He will take over as chairman of the new merged company, handing off the post of chief executive to U.S. Airways CEO Doug Parker.
The quarterly profits represent a stark turnaround from the same period in 2012, when the company lost $241 million, according to AMR.
AMR’s financial picture was greatly improved by a drop in consolidated operating expenses of $350 million, or 5.5%, compared to the same period in 2012.
The company also paid an average of $3.02 per gallon for jet fuel in the second quarter, compared to $3.24 per gallon in the same period in 2012. The drop in fuel costs saved the airline $70 million, compared to fuel spending in the same period in 2012, the company reported.
“I never thought I’d be saying that $3 a gallon is cheap,” said Horton, who called fuel prices the only expense the airline can’t control. “We try to concentrate on those things we can control.”
US Airways shareholders voted overwhelmingly last week to approve the merger, which must still get the green light by federal regulators and approval by AMR stakeholders and the bankruptcy court.
The merger, which will create the largest airline in the country, is expected to be completed by September.
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