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.

 

NEW YORK (Reuters Health) – Doctors at a California children’s hospital have found the first evidence that using an electronic system to communicate their orders may save lives.

After the system was introduced in 2007, the hospital witnessed a 20-percent drop in mortality rate, the equivalent of 36 fewer deaths over a year and a half.

“It’s the lowest rate ever observed in a children’s hospital,” said Dr. Chris Longhurst, of Stanford University and Lucile Packard Children’s Hospital in Palo Alto, California, whose findings are published in the journal Pediatrics. “It begs the question how many lives could be rescued on a national level.”

In 1999, a report from the Institute of Medicine blamed medical errors for between 44,000 and 98,000 deaths per year in the United States. Many hospitals have since introduced so-called computerized physician order entry, or CPOE, in an effort to lower that number.

Such systems of healthcare data migration allow doctors to relay prescriptions to pharmacists without delay, and without the need for the pharmacist to decipher doctors’ scrawl.

“What used to take 40 minutes or so now takes 20,” Longhurst told Reuters Health.

Although close to three in ten U.S. hospitals use CPOE, no one had been able to show a decrease in mortality until now. In 2005, a Pittsburgh hospital even reported an increase in the number of child deaths after it implemented the system.

“There have been a couple of studies previously that have taken a similar approach and have found the opposite result” of the current study, said Nir Menachemi, an expert in health information technology and policy at the University of Alabama at Birmingham. “I was more surprised by those studies.”

The debate over whether CPOE is working as intended is hardly over, said Menachemi: “I think it would be foolish to believe that any one study can end the discussion.”

According to Longhurst, what set Packard Children’s Hospital apart was its careful and well-planned implementation of CPOE.

He said the hospital, which has a total budget of between $600 and $700 million, had spent about $50 million on the project.

“We have realized some cost savings, but I could not tell you that we’ve saved money,” he said.

However, the hospital has saved lives, it appears. When analyzing about eight years’ worth of data, the researchers found that average mortality dropped from slightly more than one death per 100 hospital discharges to around 0.7 with the introduction of CPOE.

The healthcare information system has also helped doctors limit some unnecessary procedures such as blood transfusions, which Packard Children’s Hospital had overused, according to Longhurst.

While it’s hard to prove that CPOE is directly responsible for the decrease in mortality — which could have been brought about by other improvements during the same period — the researchers did the best they could to account for those factors.

“The cards were almost stacked against finding positive results,” said Menachemi, noting that the hospital had admitted more severely ill children after the new system was taken into use.

Despite the encouraging findings, Longhurst said he was concerned about President Obama’s call for rapid implementation of the electronic system.

“It should be rolled out by experienced experts,” he said. “And there are only so many experts in this country.”