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Larger Loss Forecast at American and T.W.A.

Larger Loss Forecast at American and T.W.A.

Old Jun 19, 01, 2:30 pm
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Larger Loss Forecast at American and T.W.A.

AMR Corporation, the owner of American Airlines and Trans World Airlines, will report a far greater quarterly loss than expected and will begin retiring aging airplanes ahead of schedule to cut costs, the company said yesterday.

Citing high fuel prices and a sharp decline in demand for business travel, the company said it expected to lose more than $100 million, or 65 cents a share, for its second quarter, ending June 30. Airline industry analysts expected a loss of $63.1 million, or 41 cents a share, according to First Call/Thomson Financial. Last year, the company reported a profit of $286 million, or $1.75 a share, in the comparable quarter.

"We don't foresee a near-term recovery in demand, so we expect the balance of the year to be very challenging," Thomas W. Horton, the company's chief financial officer, said in a statement.


U.S. airlines headed into turbulence this week as investors and analysts brace for gloomy forecasts about how the industry will ride out the flagging U.S. economy and high fuel prices.

Carriers are still smarting from a sharp drop in lucrative business travel, while the industry grapples with the steepest revenue declines in more than a decade, industry experts said on Tuesday.

Analysts fired a volley of downgrades to their earnings forecasts after U.S. majors Delta Air Lines (DAL.N) and American Airlines, a unit of AMR Corp. (AMR.N), warned they would post wider-than-expected second-quarter losses.

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