American Airlines kicked off the fourth quarter/year end earnings season today, reporting a $69 million loss.
The airline’s $0.28 loss compared with year-earlier net income of $17 million, or $0.07 cents.
No real surprise here.
Excluding special gains and losses, the airline posted a loss of $0.74 a share, which compared favorably to a forecasted loss of $0.76 a share, according to estimates of 11 analysts polled by Bloomberg.
The boogie man here was fuel. Fuel exceeded labor costs as American’s biggest expense last quarter, and will push costs higher this quarter and in 2008, the airline said in its earnings release. CASM for the mainline airline was up 10% for the quarter, while RASM increased 5.5%.
Other tidbits from the airline’s results included the fact that the company’s pensions are now funded at 96%, and the airline has now reduced its total debt down to $15 billion, with the level of net debt now at $11 billion.
In an internal communication to employees this morning, CEO Gerard Arpey announced:
“While our 2007 earnings were not enough to trigger profit sharing, I’m very pleased to share with you that in recognition of the collective effort of the people of American Airlines, and the special circumstances that we battled in 2007, the AMR Board of Directors has approved a one-time payment under the Customer Service Component of the Annual Incentive Plan (AIP) of $800 for every eligible employee. Checks will begin arriving in the workplace today, and continue over the next few days. Please pick up your check from your supervisor along with our thanks and appreciation for a job well done.”
Nice gesture, but it would have been better had it come a year earlier. Given the timing now, and all that has transpired in the interim — the gesture loses a lot of the positive impact it could have had — had the company given employees some type of special recognition bonus proactively, ahead of last year’s management level bonus payments.
Tomorrow? Continental Airlines reports in.
We’ll talk about both airlines and their earnings calls in-depth in this week’s PBB.
Ticker: NYSE:AMR
I was very happy to receive my check today and since I’ve been home, I’ve had a chance to follow the blog coverage of the bonus pay-out. I wish the people who are reporting the “too little, too late” news had actually come over to DFW and interviewed employees. The response is appreciative – we’re not all sullen!
Of the four Gate Agents I had interactions with at DFW yesterday not one of them had a kind word to say about the smidgeon of crumbs granted to us. I for one cannot be bought by this ruse to deflect criticism away from the elite few. While Lisa Arpey drips in jewelry and tootles around Colleyville in her Bentley the family gift at our house for Christmas was a new set of brake pads for our twelve year old minivan.
How many millions is enough and now we find the employees longing for the “good old days” of Bob Crandall. That is how bad it has gotten.