AMR, the parent company of American Airlines, reports a first quarter net profit of $8 million, excluding reorganization and special items, and makes anticipated progress towards the agreed upon merger with US Airways. The strategic move is expected to have benefits for customers, employees, and shareholders, and provides the potential for a full recovery of at least 3.5% of AMR’s diluted stock.
Key highlights from this quarters summary include a GAAP net loss of $341 million, which is a 1.3 billion improvement over first quarter 2012. First quarter revenue of $6.1 billion is the highest in company history, and it is also the first profitable quarter since 2007. American took delivery of 12 new aircrafts, and expects to take delivery of a total of 59 during all of 2013. Domestic PRASM improved, consolidated operating expenses decreased, and operations achieved an 80 percent on-time arrival rate.
"The fundamental changes we have been able to achieve in streamlining our cost structure and making our operations more efficient are yielding substantial results," says Bella Goren, AMR's chief financial officer.
AMR filed for bankruptcy in November of 2011, and was granted permission from the Court to prepare and execute a Plan of Reorganization, part of which involves the merger. To date, AMR has completed the majority of its financial restructuring, including reducing debt, renegotiating aircraft leases and facilities agreements, grounding older aircrafts, and renegotiating supplier relationships.
The merger will endow the new parent company with an equity value of $11 billion. Projected benefits include more destinations and investments in new aircrafts, technology, products and services, and greater long-term opportunities for employees, who recently suffered down-sizing from severe budget cuts.
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