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AMR Corp. says quarterly seat revenue could fall 11 percent

Posted on: Wed, 18 Mar 2009 21:58:00 EDT

Symbols: AMR

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Mar 18, 2009 (Fort Worth Star-Telegram - McClatchy-Tribune Information Services via COMTEX) --
AMR | Quote | Chart | News | PowerRating -- Revenues at AMR Corp., parent of American Airlines, will drop as much as 11 percent during the first quarter amid a decline in travel and falling ticket prices.

Fort Worth-based AMR said in a filing with the Securities and Exchange Commission Wednesday that revenues measured by passenger seat-mile -- a standard industry measurement -- will be down between 10.2 percent and 11.2 percent compared to the previous quarter for the entire company, which also includes the American Eagle regional carrier and other subsidiaries.

For the American mainline operation, revenues will be down between 9.6 percent and 11.6 percent, according to the filing.

Airlines nationwide are reporting a revenue squeeze as the recession keeps travelers at home. Many airlines have been slashing fares, even during the busy summer travel seasons, to try to entice customers to return.

Continental Airlines, based in Houston, said Tuesday that its passenger revenues in March have declined by more than 18 percent.

"Yes, demand is this bad," said analyst Kevin Crissey of UBS in a note to investors Wednesday.

AMR also reported that its unrestricted cash balance will fall to $2.7 billion at the end of the quarter. That's down from the $4.5 billion AMR had in its coffers at the end of the first quarter of 2008.

Industry analyst Darryl Jenkins said it won't be clear for several months whether revenues have bottomed out for the airlines. Many businesses and consumers are waiting longer to make travel decisions to see what happens with the economy, he said.

"We saw the same thing after 9-11, people waited longer to decide if they were going to travel," he said. "I think we'll have a clearer picture by May."

AMR will report its earnings for the first quarter on April 15.

Shares of AMR (ticker: AMR | Quote | Chart | News | PowerRating) closed at $3.43 per share, up 12 cents, in trading Wednesday.

Trebor Banstetter, (817) 390-7064

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