American Airlines, which is in the final stages of bankruptcy and under pressure from US Airways to merge, reported on Wednesday a fourth-quarter profit mostly because of lower costs and some reorganization credits.
Without these special items, including some bankruptcy-related tax benefits, the company had a loss in the quarter. In providing the figures, the carrier is eager to prove that its restructuring has been successful and that it should come out of bankruptcy as an independent airline.
A decision about the company’s fate could come in the next few weeks as the board of AMR, American’s corporate parent, considers its options. These include a merger with US Airways while American is still under Chapter 11 bankruptcy protection.
Pressure has been mounting for such an outcome. US Airways has repeatedly signaled its interest in a merger and last year struck a deal with American’s three labor groups, representing pilots, flight attendants and mechanics, to support such a consolidation. Since then, these groups have worked out a merger blueprint with their counterparts at US Airways.
But American’s management has fought against a merger. It has argued that thanks to its reorganization, the airline can compete on an equal footing against Delta Air Lines and United Airlines. Once the top carrier in the United States, American has been overtaken by both rivals, which have used mergers in recent years to create more formidable competitors.
“We have made enormous progress towards building the new American,” Tom Horton, the airline’s chairman and chief executive, said in a statement. “Our momentum is growing toward emerging as a strong, healthy and vibrant competitor.”
In the last year, American said, it has completed much of its restructuring. It cut its labor costs, pared its debt, renegotiated aircraft leases and airport agreements, grounded older planes, reorganized its regional fleet and reviewed its supplier agreements. It has also placed a major order for 600 new planes. Last year, it took delivery of 30 aircraft — 28 Boeing 737-800s and two Boeing 777s — with extended range.
In the fourth quarter, American had a net profit of $262 million, compared with a net loss of $1.1 billion in the year-earlier period. The figures include $350 million in positive reorganization and special items. Absent those, the carrier had $88 million loss in the fourth quarter.
For the full year, American lost $1.9 billion, compared with a loss of $2 billion in 2011. Revenue rose to $24.9 billion, the highest in the company’s history, compared with $24 billion the previous year.
The company said it had $4.7 billion in cash and short-term investments, including a restricted cash balance of $850 million.
Article source: http://www.nytimes.com/2013/01/17/business/american-air-reports-a-profit.html?partner=rss&emc=rss