PLANYC 2030

 

AMR Corp ., parent of American Airlines Inc., said Wednesday that it lost $10.7 million in the second quarter – the 10th time in 11 quarters that it has posted a loss.

The Fort Worth-based company also announced that chief financial officer Tom Horton, 49, will step up to become president of AMR and American today, assuming those jobs from chairman and chief executive Gerard Arpey.

AMR also announced that it has ordered 35 Boeing 737-800s to replace its aging and less fuel-efficient McDonnell Douglas MD-80s.

While AMR’s $11 million loss is a sharp turnaround from its $390 million loss in second quarter 2009, the results probably will make AMR the only major U.S. carrier to lose money for the three months that ended on June 30.

American’s two largest U.S. rivals have posted huge profits for the quarter, the highest in at least 10 years for both. Delta Air Lines Inc. earned $467 million; United Airlines Inc.’s parent earned $273 million.

Smaller AirTran Holdings Inc . and US Airways Group also were profitable.

Despite the loss, Arpey and Horton tried to spread a message of hope as they talked Wednesday to analysts. Horton noted that AMR’s operating income of $196 million was its first operating profit in three years, despite the net loss.

On a net basis, AMR lost $10.7 million, or 3 cents a share, only a fraction of the $390 million, or $1.39 a share, it lost a year earlier.

Its revenue rose 16 percent to $5.67 billion from $4.89 billion in the 2009 quarter.

AMR shares fell 23 cents Wednesday to $6.62 in regular trading and lost a penny more in after-hours trading.

“Of course, we are far from satisfied with these results. Losing money is not acceptable,” Horton told analysts.

“But we believe the improvement we’re seeing indicates that we’re headed in the right direction, and we’re determined to build on our progress and return to solid profitability.”

They pointed to American’s strategy of focusing on five major airports and its network to improve its fortunes, helped tremendously by antitrust immunity with its partners across the Atlantic, just approved by regulators; its planned business venture with Japan Airlines, undergoing review now; and its new partnership with JetBlue in Boston and New York.

With Horton’s promotion as Arpey’s heir apparent, AMR and American have only one remaining executive vice president, Bob Reding, EVP of operations.

Dan Garton, who had been EVP of marketing, moved last month to be president and CEO of AMR’s regional operations, American Eagle. Horton said Garton’s former duties will be spread among a variety of executives, including a number who received promotions Wednesday.

Horton’s replacement as CFO will be Bella Goren, who will keep her title as senior vice president.

When the 35 new 737-800s are delivered in 2011 and 2012, American will fly 195 Boeing 737-800s. And 11 already ordered are scheduled to arrive between 2013 and 2016.

American also said that it won’t receive its first Boeing 787-9s until 2014, two years after the original schedule. The delay had been expected after Boeing has had to postpone the new aircraft a number of times.

 

Airlines are cutting down on lengthy tarmac delays in the face of steep fines.

The number of planes stuck on airport tarmacs for more than three hours fell to five in May. That’s the second-lowest monthly total since the federal government began monitoring them in the current fashion in October 2008, the Transportation Department said Thursday.

In May of last year, 34 flights were delayed more than three hours, data from the department’s Bureau of Transportation Statistics show.

This May was the first full month that U.S. airlines operated under a new federal rule that says airlines must let passengers off planes if they’ve been stuck for three hours on the tarmac or face fines of up to $27,500 per passenger.

“The rule is a resounding success,” says Kate Hanni, director of FlyersRights.org, which pushed for the new rule. “I hate to say I told you so, but I told you so.”

Four of the five delays in May were United Airlines flights to Denver on May 26 that were diverted to Colorado Springs because of weather. Delta Air Lines (DAL) had the other delay. The department hasn’t fined either airline yet because it’s investigating the delays.

The Air Transport Association, which represents many of the nation’s big airlines, says the low number of delays in May reflects how airlines have worked to prevent them and how the weather has been good — more than the possibility of fines.

“The number of lengthy tarmac delays has been in decline over a year,” says association spokesman David Castelveter.

Lengthy delays have been declining rapidly in recent months leading up to the rule. In April, when the rule took effect, only four delays were reported. There were 25 in March. In comparison, there were 268 in June 2009.

Castelveter says airlines and airports have taken new steps to curb delays in recent months. They’ve upped the “decision-making process” to higher-ranking executives during delays, he says.

Earlier this month, New York JFK extended its trial of a system that, to prevent planes from stacking up, limits the number of aircraft that can line up on the taxiway for departure.

Despite warnings that airlines would cancel flights rather than risk fines for lengthy delays, the department reported that the cancellation rate this May was 1.2% of all flights. That was just slightly higher than the 0.9% reported in May 2009.

The department also reported that 79.9% of domestic flights operated by 18 largest U.S. carriers arrived on time in May, or within 15 minutes of schedule. That’s lower than the 80.5% in May 2009 and April 2010′s 85.3%.

The carriers also reported a mishandled baggage rate of 3.29 reports per 1,000 passengers in May, an improvement over May 2009′s rate of 3.65, but down from April 2010′s 2.89.