Air Transport World

It got worse: US Major airlines follow up a year of record losses...with another year of record losses. (Finance).

Unbelievable as it seems, the 10 largest US airlines as a group lost more money in 2002 than in 2001. The deficit for the Major airline segment totaled $11.4 billion last year, up from $7.5 billion in 2001. True, 2001 losses were reduced substantially by the $5 billion federal bailout. On the other hand, the industry did not experience a cata-clysmic event similar to 9/11 in 2002.

Of the group, only Southwest Airlines was profitable in either period. The largest annual loss was registered by American Airlines parent AMR Corp.

Stronger-than-anticipated year end holiday traffic boosted the fourth-quarter, but a spate of "unusual" charges led to a deterioration as the 10 showed a combined deficit of $3.8 billion compared to $3.5 billion in 2001.

Fourth-quarter operating revenues rose 14.2% against only a 4.7% increase in operating expenses. As a result, the combined operating loss for the 10 was reduced to $3.4 billion from $4.8 billion. For the full year, revenues declined 7.3% while operating expenses slipped 6.7%. Operating loss improved slightly to just under $10 billion.

AMR Corp. reported a net loss of $529 million for the fourth quarter, bettering the 2001 quarter's net loss of $734 million before special items and $798 million after those items. JO Jeff Campbell said he expects the company to report a loss in the current quarter that will be comparable to 2002 fourth-quarter results. Operating revenues jumped 10.1% and operating expenses fell 1.7%, halving the operating loss to $679 million.

For the year, AMR reported a net loss of $3.5 billion, almost double 2001's net loss of $1.8 billion. Excluding special items, the 2002 net loss was $2 billion versus a 2001 net loss of $1.4 billion before special items. Operating revenues decreased 8.8% and operating expenses fell 3.8%. Operating loss totaled $3.33 billion, a jump from the prior year's operating loss of $2.47 billion.

UAL Corp. reported a fourth-quarter loss of $1.47 billion net of $77 million in special items-primarily severance costs and expenses related to its Chapter 11 filing-and a noncash expense of $326 million. The parent of United Airlines lost $308 million in the year-ago period, or $640 million excluding special items. The huge quarterly deficit brought UAL's full-year loss to $3. …

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