AMR, Parent Of American, Posts Huge Loss

AMR, currently in Chapter 11, posted a massive loss for the final quarter of 2011. .Much of the red ink was due to write-off because of a restructuring of the airline. With lower labor costs, fewer plane leases, and lower debt, AMR is expected to exit bankruptcy in good financial shape. The anticipation of this has caused rumors that it will be takeover target of another airline–perhaps US Air or Delta.

AMR reported as part of an SEC filing

Fourth Quarter 2011 Results  AMR recorded a consolidated net loss of $1.1 billion for the fourth quarter of 2011 compared to a consolidated net loss of $97 million in the fourth quarter of 2010. The fourth quarter 2011 results include:

•$886 million in non-cash special charges and reorganization items. •Of that amount, $768 million is related to special items, which includes a $725 million non-cash charge resulting from the impairment of certain aircraft and gates and a $43 million unfavorable adjustment to revenue, as a result of changes in assumptions related to the recognition of AAdvantage® revenue. •The Company recognized $118 million in reorganization items, primarily due to the rejection of 24 leased aircraft: 20 MD-80s and 4 Fokker 100s; as well as professional fees.

 

Excluding these items, the loss in the fourth quarter of 2011 was $209 million, which compares to a loss, excluding special items, of $69 million in the same period of 2010.