Air Transport World

U.S. majors. (major airlines of the United States) (World Airline Report 1990)

American: Last year was not kind to the airline industry. In the U.S., AMR Corp., parent of the country's largest carrier, suffered what Chairman/President Robert Crandall called "terribly disappointing" net losses of $215.1 million for the fourth quarter and $39.6 million for the year despite a jump of 11.8% to $11.7 billion in revenues. Operating income fell to $124 million from $744 million in 1989, when AMR Corp. had a net profit of $454.8 million. Subsidiary American Airlines produced 94% of AMR's 1990 revenues or $11 billion, up 10.5%, and its operating income of $68 million was down steeply from $730.8 million in 1989.

Crandall said the 1990 results reflected the very adverse impact on all carriers" of the dramatic rise in fuel prices and "the loss of traffic due to a slowing economy and a host of ill-advised industry pricing practices. " American's situation was aggravated by pilot job actions in the fourth quarter that resulted in cancellation of large numbers of flights, he added. An agreement with the carrier's Allied Pilot Association finally was reached earlier this year.

American's chief expects cost-cutting measures instituted in mid-1990 to have a positive impact on 1991 results. These measures included termination of leases on the BAe 146s and Boeing 737-200/300s acquired with the purchase of AirCal in 1987. Additionally, several facility projects were deferred.

Most of last year's other news at American involved new routes, among them inauguration of service to Tokyo from its San Jose hub. In March, it received authority to fly to Milan from Chicago; in April it acquired Eastern's routes to 20 destinations in 15 Central and South American countries and in December, it struck deals for Continental's Seattle-Tokyo route authority and for TWA's remaining U.S.-London routes. It purchased TWA's Chicago-London route in 1989 and begins service this month, to Gatwick initially.

The larger agreement with TWA, however, was put in jeopardy by DOT's decision to let American buy only three of the six routes sought and by efforts by the City of St. Louis to come up with a buyer for TWA. Secretary of Transportation Samuel Skinner finally gave the O.K. in late April and at this writing, American was getting ready to launch service. If it is received, the carrier will launch service to London Heathrow from Chicago, Los Angeles, New York and Boston, as well as to Tokyo from Seattle.

Meanwhile, on the traffic front, thanks to a 28.5% jump to 22.1 billion in international RPKs American wound up 1990 with a 4.8% gain to 123.9 billion in total RPKs. Domestic RPKs were up a scant 0.7%, total passenger boardings rose

1.6% to 73,251,070 and a renewed emphasis on cargo produced double-digit growth of 19.9% to 1.1 billion FTKs. Capacity increased 7.3% to cut load factor by 1.5 points to 62.3%. Michael Gunn, senior VP-marketing, said the carrier was pleased with the growth we achieved in 1990 under some very trying circumstances."

America West: Despite an operating loss of $31.6 million and a huge net loss of $74.7 million in 1990, America West is still rated as "a survivor" by many analysts, largely because of its strong cash position-$140 million at the end of the year. Most of its net loss-$56.3 million-came in the fourth quarter and Chairman/CEO Edward Beauvais placed the bulk of the blame on the fuel-cost surge that followed iraq's invasion of Kuwait. in 1989, America West had an operating profit of $48.1 million and a net of $20 million.

The newly ordained major continued to expand aggressively last year, however, as evidenced by its growth of 32. …

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