Saying it has made significant progress in its quest to emerge as an industry leader, American Airlines reported that it generated $24.9 billion in consolidated revenue last year, the highest in company history.
Net profits in the fourth quarter of 2012 were an estimated $142 million less than expected due to the impact of Hurricane Sandy and other operational disruptions, but the company still finished the quarter showing a net loss of $88 million, a year-over-year improvement of $121 million. American’s full year net loss in 2012 stood at $1.9 billion, a $100 million improvement over 2011’s result.
The carrier has mostly emerged from its restructuring, finding savings by reducing debt, grounding older airplanes and renegotiating with suppliers and unions. According to a press release, the company will reach its targeted restructuring cost savings later this year. Last year, labor costs for the airline declined 17 percent on newly negotiated, six-year contracts, management positions were eliminated for streamlining purposes, and aircraft financing terms were renegotiated, leading to a $400 million savings in the fourth quarter.
In addition to improvements gleaned from restructuring, American also bolstered its fleet, receiving 11 new aircraft in the fourth quarter. The company said these additions put it on track to have the youngest fleet by 2017.
“We have made enormous progress towards building the new American,” Tom Horton, chairman and chief executive officer of American’s parent company, said in a statement. “Our momentum is growing toward emerging as a strong, healthy and vibrant competitor. In fact, with what we have accomplished, we expect to show strong results beginning in the first quarter of 2013.”
The release summing up 2012's results for the airline made no mention of merger talks with US Airways. These talks have reportedly intensified, with most analysts anticipating a merger announcement will come shortly. Neither officials from US Airways or American will comment on the rumors officially due to non-disclosure agreements. - Jon Ross