Air Transport World

Not half bad: US airline recovery continues, revenue decline finally is halted.(Finance)

The 10 US Major passenger airlines collectively lost $5.49 billion last year, or hall the $10.99 billion lost in 2002, while the industry operating loss declined to $2.73 billion from $9.94 billion over the same period. Results are net of special items, including $2.11 billion in federal security lees and taxes rebated to the industry during the second quarter (ATW, 9/03, p. 70).

Also, for the first time since 2000 annual turnover actually increased: 2003 annual revenues for the 10 totaled $81.8 billion, up 1.1% over 2002. Sales still remain severely depressed compared to the peak year of 2000, however, when the industry generated $97.7 billion in revenues. Operating expenses were down 7% in 2003 to $84.6 billion.

For the fourth quarter, industry net loss after special items totaled $575.2 million, reduced from $3.87 billion in the 2002 period. Revenues rose 5.7% to $20.88 billion while operating expenses fell 6.7% to $21.58 billion. As a result, operating loss was narrowed to $706.5 million from $3.37 billion in the fourth quarter of 2002.

AMR Corp., parent of American Airlines, reported a net loss of $111 million for the quarter, improved from a deficit of $529 million in the year-earlier period. Excluding special items and taxes it posted a $95 million net loss versus a pre-tax net loss of $828 million in 2002. "While we are certainly not satisfied with a loss, we are nonetheless pleased with our progress," President and CEO Gerard Arpey said. Operating revenues during the quarter rose 3.9% while operating expenses dropped 5.8%, largely owing to a 22% decline in labor costs resulting from the concessionary agreements reached in late April.

For the full year, AMR lost $1.23 billion, greatly improved from a $3.51 billion net loss in 2002. Adjusted for special items and year-over-year tax differences, the 2003 loss totaled $1.5 billion compared to $3.2 billion in 2002. Of special note is the fact that American Airlines' cost per ASM was lower than Continental Airlines' in the fourth quarter. Heretofore, Continental had been the lowest-cost producer among the Big Six network carriers. …

Log in to your account to read this article – and millions more.