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American reports improved 1Q earningsApril 18, 2013
AMR's Tom Horton and United's Doug Parker announced a merger in February. Photo by Associated Press
DAVID KOENIG,AP Airlines Writer
DALLAS (AP) — American Airlines parent AMR Corp. reported a smaller loss for the first quarter than a year ago on slightly higher revenue and much lower labor costs.
AMR said Thursday that it lost $341 million, compared with a loss of $1.66 billion a year earlier.
The nation's third-largest airline said that it would've earned $8 million excluding costs of its bankruptcy restructuring. The first quarter is the weakest of the year for airlines, and this marked AMR's first adjusted profit in the period since 2007.
"A modest first quarter profit shows that we are off and running for the year," CEO Tom Horton said in an interview.
Revenue rose 1 percent to $6.1 billion. Labor costs declined 17 percent as American cut jobs. Horton said the company's bankruptcy restructuring made its costs competitive with other airlines.
AMR is in the process of merging with US Airways and emerging from bankruptcy protection. If antitrust regulators approve the merger, the combined airline will be the biggest in the world.
Once that deal is done, mergers will have reduced eight big U.S. airline companies to four. At the same time, airlines have limited the supply of seats, which helps boost prices. American enjoyed it highest average fare per mile ever in the January-March period.
American's on-time performance improved in the first quarter. But it suffered a setback this week with a computer-systems breakdown that caused massive delays and cancellations Tuesday and Wednesday. Horton took to YouTube to apologize to customers, and blamed the outage on a "software issue." He declined to be much more specific Thursday.
"We do understand the cause of the failure," Horton said. "We're continuing to investigate and do further testing, but we have a high degree of confidence that situation won't recur."