American Eagle operations contributed $2.470 billion to AMR’s operating revenues, in 2007, down 1.5 percent while expenses rose from $2.675 billion in 2006 to nearly $2.8 billion during 2007. For the fourth quarter, during which AMR announced its intentions to sell its regional operations, regional affiliates contributed $606 million, up 3.2 percent. However, expenses also rose from $654 million in the year-ago period to $717 million, at a time when the carrier is trying to cut costs and when fuel is consistently growing. Related Story
During its investor’s conference Gerard Arpey said the company has yet to decide the form the spin off will take -- spin-off to AMR shareholders, a sale to a third party, or some other form of separation from AMR -- but said it is scheduled for the second half. Given the industry consolidation activity, analysts naturally asked if the spin off would be postponed, but Arpey said it would not.
AMR posted a net profit of $504 million, or $1.78 per diluted share the first back-to-back annual profit since the 1999-2000 period. AMR Corporation, reported a net loss of $69 million for the fourth quarter of 2007, or $0.28 per share ending a six quarter string of profitability. The company cited punishing fuel costs as well as record breaking bad weather last year. It said it would be very cautious on it 2008 capacity plans. For a complete analysis see the next issue of Regional Aviation News.