AMR blames loss on jet fuel costs
FORT WORTH -- American Airlines' parent Wednesday led off what's going to be an ugly round of airline quarterly loss reports that will show the impact of high fuel prices.
The main difference? American paid $2.74 a gallon for jet fuel in the first quarter, vs. $1.85 a gallon in the same period last year. Without that 48% increase, AMR would have reported a first-quarter profit of about $337 million, officials said.
The airline said it expects to pay an average $3.01 per gallon for fuel this quarter.
The second quarter's results also will reflect a loss "in the high tens of millions of dollars" as a result of last week's cancellation of about 3,500 flights, American officials estimated Wednesday.
The airline had to ground all 300 of its Boeing MD-80s when Federal Aviation Administration inspectors ruled they were out of compliance with mandatory repair orders.
AMR CEO Gerard Arpey told analysts and reporters on a conference call Wednesday that soaring fuel prices have "become the new reality for American and the industry, and there's certainly no silver bullet for that problem."
Arpey deflected questions about American's potential acquisition of another airline in response to the proposed merger of Delta and Northwest.
American is responding to high fuel prices by cutting capacity further than previously planned. Most of that pullback will come late in the year.
The carrier also said it is accelerating the planned delivery of Boeing 737-300s into 2009 and 2010 to replace less efficient MD-80s.
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