UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event reported: July 20, 2011
American Airlines, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 1-2691 | 13-1502798 | ||
| (State of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
| 4333 Amon Carter Blvd. Fort Worth, Texas | 76155 | |||
| (Address of principal executive offices) | (Zip code) | |||
(817) 963-1234
(Registrant’s telephone number)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition |
American Airlines, Inc. (the Company) is furnishing herewith a press release issued on July 20, 2011 by its parent company, AMR Corporation (AMR), as Exhibit 99.1, which is included herein. This press release was issued to report the Company’s second quarter 2011 results and other items.
| Item 8.01 | Other Events |
The Company is furnishing herewith a press release issued on July 20, 2011 by AMR as Exhibit 99.2, which is included herein, and a related presentation, which is attached as Exhibit 99.3 to this Form 8-K, announcing an aircraft order by American Airlines, Inc.
The Company is also furnishing herewith a press release issued on July 20, 2011 by AMR as Exhibit 99.4, which is included herein, announcing the Company’s intent to move forward with the divestiture of American Eagle Holding Corporation (AMR Eagle).
Information in these Items 2.02 and 8.01, including Exhibits 99.1 through 99.4, are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits |
(c) Exhibits
| Exhibit 99.1 | Press Release of AMR dated July 20, 2011 – Second Quarter 2011 Earnings | |
| Exhibit 99.2 | Press Release of AMR dated July 20, 2011 – Aircraft Order | |
| Exhibit 99.3 | Slide Presentation – Aircraft Order | |
| Exhibit 99.4 | Press Release of AMR dated July 20, 2011 – AMR Eagle Divestiture Intent | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| American Airlines, Inc. |
| /s/ Kenneth W. Wimberly |
| Kenneth W. Wimberly |
| Corporate Secretary |
Dated: July 20, 2011
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Press Release of AMR dated July 20, 2011 – Second Quarter 2011 Earnings | |
| 99.2 | Press Release of AMR dated July 20, 2011 – Aircraft Order | |
| 99.3 | Slide Presentation – Aircraft Order | |
| 99.4 | Press Release of AMR dated 20, 2011 – AMR Eagle Divestiture Intent | |
Exhibit 99.1
| CONTACT: | Sean Collins | |||
| Corporate Communications | ||||
| Fort Worth, Texas | ||||
| 817-967-1577 | ||||
| mediarelations@aa.com |
FOR RELEASE: Wednesday, July 20, 2011
Editor’s Note: A live webcast reporting second quarter results will be broadcast on the Internet on July 20 at 2 p.m. EDT (Windows Media Player required for viewing)
AMR CORPORATION REPORTS SECOND QUARTER 2011
NET LOSS OF $286 MILLION
Fuel Price Increase of 31 Percent Year-Over-Year Drove $524 Million
of Additional Expense
AMR Second Quarter 2011 Revenue Rose 8 Percent Compared to Same
Period a Year Ago
AMR TAKES STEPS TO POSITION THE COMPANY FOR LONG-TERM SUCCESS, including landmark agreements to transform its narrowbody fleet; intention to move forward with a divestiture of American Eagle regional affiliate; and implementation of additional initiatives
FORT WORTH, Texas – AMR Corporation, the parent company of American Airlines, Inc., today reported a net loss of $286 million for the second quarter of 2011, or $0.85 per share, compared to a net loss of $11 million, or $0.03 per share, in the second quarter of 2010.
The Company’s second quarter performance was negatively impacted by fuel prices that increased 31 percent compared to the second quarter 2010. Including the impact of fuel hedging, AMR paid on average $3.12 per gallon for jet fuel in the second quarter of this year versus $2.37 per gallon in the second quarter 2010. As a result, the Company paid $524 million more for fuel in the second quarter 2011 than it would have paid at prevailing prices from the corresponding prior-year period.
“This past quarter was challenging in many respects,” said AMR Chairman and CEO Gerard Arpey. “We remain acutely focused on taking the necessary steps to manage through our near-term challenges while continuing to lay the foundation for long-term success. We believe we have the right framework under our Flight Plan 2020 strategy to achieve our long-term objectives for the benefit of all our stakeholders, and today we took several major steps forward. I would also like to thank all of our employees for their efforts to serve our customers, particularly during the extreme weather conditions and tornadoes in April and May, and for their hard work and dedication during a very busy summer.”
Arpey outlined several immediate actions the company is taking to be more competitive and efficient, including the following:
| • | American has adjusted its network for the fall, with the cancellation of its San Francisco to Honolulu and Los Angeles to San Salvador flights, as well as a number of other adjustments to reduce costs and improve revenue performance. |
| • | In conjunction with American’s trans-Atlantic joint business partners, the company is evaluating its winter flying, and anticipates making seasonal route and day-of -week flying adjustments in early 2012 to improve its results. |
| • | American announced today it intends to discontinue operating its reservations office in Dublin, Ireland, to reduce its operating costs. |
| • | American also applied for a waiver from the U.S. Department of Transportation to temporarily suspend service from New York’s JFK to Tokyo’s Haneda Airport through mid-2012. American plans to suspend its service to Haneda beginning in early September in an effort to help it offer service more in line with market demand, as Japan continues to recover from March’s earthquake and tsunami. |
AMR Corporation Announces Landmark Fleet Agreements with Boeing and Airbus to Transform American’s Narrowbody Fleet
AMR today announced landmark agreements with Boeing and Airbus that will enable it to transform American’s narrowbody fleet. These new aircraft will allow American to reduce its operating and fuel costs and deliver a broad range of state-of-the-art amenities to customers, while maximizing the Company’s financial flexibility.
Under the new agreements, American will acquire 460 narrowbody aircraft from the Boeing 737 and Airbus A320 families beginning in 2013 — the largest aircraft order in aviation history. As part of these agreements, starting in 2017 American will become the first U.S. network airline to begin taking delivery of “next generation” narrowbody aircraft that will further accelerate fuel-efficiency gains.
These new deliveries are expected to pave the way for American to have the youngest and most fuel-efficient fleet among its U.S. airline peers in approximately five years. American also will benefit from approximately $13 billion of committed financing from the manufacturers through lease transactions that will help maximize balance sheet flexibility and reduce risk. The financing fully covers the first 230 deliveries. (AMR provided additional details in a separate news release issued this morning. Please refer to that release for more details).
In addition, American now has eight Boeing 777-300ERs that are scheduled for delivery in 2012 and 2013, including three additional aircraft for which options were recently exercised. These 777-300ERs will complement American’s fleet, offering additional network flexibility, and providing increased efficiency due to better seat mile economics and performance characteristics.
AMR Corporation Announces Intent to Move Forward with the Divestiture of American Eagle
AMR announced today its intent to move forward with the divestiture of AMR Eagle Holding Corporation (“Eagle”). AMR currently expects the divestiture to take the form of a spin-off of Eagle stock to the shareholders of AMR. Strategically, AMR believes a divestiture would be beneficial, as it would help ensure American maintains competitive rates and services for its regional feed into the future. A divestiture would also provide Eagle an opportunity to vie for the business of other mainline carriers and allow the carrier to expand its operations.
(AMR provided additional details regarding American Eagle in a separate news release issued this morning. Please refer to that release for more details).
Financial and Operational Performance
AMR reported second quarter consolidated revenues of approximately $6.1 billion, an increase of 7.8 percent year-over-year. American, its regional affiliates, AA Cargo, as well as the ‘other revenue’ category, experienced year-over-year increases, as total operating revenue was approximately $440 million higher in second quarter 2011 than in the second quarter 2010.
Consolidated passenger revenue per available seat mile (unit revenue) grew 4.9 percent, while mainline unit revenue at American grew 4.3 percent, in each case compared to the second quarter 2010. The Company’s second quarter unit revenue performance reflects a modestly improved revenue environment year-over-year. AMR faced a number of revenue headwinds in the quarter, including extreme weather events in Dallas/Fort Worth and the continued impact of the earthquake and tsunami that struck Japan in March.
American’s passenger yield, which represents the average of fares paid, increased by 4.6 percent year-over-year in the second quarter.
Mainline unit costs, excluding fuel, in the second quarter increased 1.4 percent year-over-year. Non-fuel unit cost performance reflects the impact of American’s cost reduction efforts, offset by weather-related operational disruptions and the previously announced capacity reductions.
Mainline capacity, or total available seat miles, in the second quarter increased by 2.1 percent compared to the second quarter 2010, as the Company selectively added capacity to key markets, such as Asia.
American’s mainline load factor – or percentage of total seats filled – was 83.6 percent during the second quarter 2011, which compares to a load factor of 83.9 percent in the year ago period.
Balance Sheet Update
AMR ended the second quarter with approximately $5.6 billion in cash and short-term investments, including a restricted balance of approximately $457 million. This compares to a balance of $5.5 billion in cash and short-term investments, including a restricted balance of $461 million, at the end of the second quarter 2010.
AMR’s Total Debt, which it defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, was $17.1 billion at the end of the second quarter 2011, compared to $16.1 billion a year earlier.
AMR’s Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, was $11.9 billion at the end of the second quarter, compared to $11.0 billion in the second quarter 2010.
Other Second Quarter and Recent Highlights
| • | Malaysia Airlines announced it is joining oneworld®, adding one of aviation’s most frequent award winners to the world’s leading quality airline alliance. Malaysia Airlines and its subsidiaries serve almost 100 destinations globally in more than 30 countries across Asia, Australasia, Europe, Africa and North and South America. Malaysia Airlines is expected to start flying as a member of oneworld late next year. |
| • | American Airlines and Qantas announced they are seeking regulatory approval for a joint business agreement (JBA) on their services between Australia/New Zealand and the United States, within these regions, and to countries beyond. If approved, the JBA will create a new strategic partnership between Qantas and American involving close commercial cooperation and resulting in significant benefits for consumers. |
| • | In July, American entered into a sale-leaseback arrangement with AerCap, a leading independent aircraft leasing company, to finance up to 35 Boeing 737-800 Next Generation aircraft, including 29 firm deliveries, scheduled to be delivered to American. The arrangement also covers six Boeing 737-800 Next Generation aircraft subject to purchase rights that, if exercised by American, would be scheduled for delivery in 2013 - 2014. |
| • | On July 7, Priceline said that its online airline ticketing service is now booking more than 1,000 tickets a day through American Airlines AA Direct Connect. Priceline.com has been booking tickets through AA Direct Connect for approximately six months. |
| • | American Airlines and Citi Cards have launched the Citi ExecutiveSM / AAdvantage® World EliteTM MasterCard® (Citi Executive / AAdvantage card), which will deliver premium travel services and experiences to American Airlines customers. The new Citi Executive / AAdvantage card offers unprecedented airline benefits that allow cardmembers to travel in comfort and style. |
Guidance
Mainline and Consolidated Capacity
In light of incremental 2011 capacity reductions, AMR now expects its full-year mainline capacity to be up 1.9 percent versus 2010, with domestic capacity down 0.1 percent and international capacity up 5.0 percent compared to 2010 levels. On a consolidated basis, AMR now expects full-year capacity will be up 2.6 percent.
AMR expects mainline capacity in the third quarter 2011 to be 1.0 percent higher than third quarter 2010, with domestic capacity expected to be down 0.8 percent and international capacity expected to be up 3.6 percent. AMR expects consolidated capacity in the third quarter of 2011 to be up 1.6 percent year-over-year.
Fuel Expense and Hedging
The cost of jet fuel has been increasing and remains very volatile. Based on the July 12 forward curve, AMR is planning for an average system price of $3.15 per gallon in the third quarter 2011 and $3.06 per gallon for all of 2011. This compares to an average system price of $2.32 per gallon in 2010. Consolidated consumption for the third quarter is expected to be 723 million gallons of jet fuel.
AMR has 50 percent of its anticipated third quarter 2011 fuel consumption hedged at an average cap of $2.89 per gallon of jet fuel equivalent ($87 per barrel crude equivalent), with 39 percent subject to an average floor of $2.15 per gallon of jet fuel equivalent ($56 per barrel crude equivalent). AMR has 48 percent of its anticipated full-year consumption hedged at an average cap of $2.73 per gallon of jet fuel equivalent ($84 per barrel crude equivalent), with 37 percent subject to an average floor of $2.05 per gallon of jet fuel equivalent ($56 per barrel crude equivalent).
Mainline and Consolidated Cost per Available Seat Mile (CASM), Excluding Special Items
Fuel prices are expected to continue to be a significant cost headwind in 2011. AMR remains intensely focused on containing costs, despite significant fuel price and other headwinds in a number of areas, including facilities and healthcare costs. As a result, cost per available seat mile for 2011, excluding fuel and the potential impact of any new labor agreements, is now expected to increase 0.5 percent to 1.5 percent compared to 2010.
Cost/ASM – Percent Change
| 3Q2011 (est.) vs. 3Q2010 H/(L) |
year 2011 (est.) H/(L) | |||
| Mainline CASM |
12.9% - 13.3% | 8.9% – 9.9% | ||
| Excluding Fuel |
2.4 – 2.8 | 0.5 – 1.5 | ||
| Consolidated CASM |
13.1 – 13.5 | 9.0 - 10.0 | ||
| Excluding Fuel |
2.6 – 3.0 | 0.5 – 1.5 | ||
Editor’s Note: Senior management of AMR will make a presentation to analysts during a teleconference on Wednesday, July 20, at 2 p.m. EDT. Following the analyst call, they will hold a question-and-answer conference call for media. Reporters interested in listening to the presentation or participating in the media Q&A should call 817-967-1577.
Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company’s expectations or beliefs concerning future events. When used in this release, the words “expects” “estimates,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook” “may,” “will,” “should” “seeks” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe our objectives, plans or goals, or actions we may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, the Company’s expectations concerning operations and financial conditions, including changes in capacity, revenues, and costs; future financing plans and needs; the amounts of the Company’s unencumbered assets and other sources of liquidity; fleet plans; overall economic and industry conditions; plans and objectives for future operations; a potential spin-off or other divestiture of Eagle; regulatory approvals and actions; and the impact on the Company of its results of operations in recent years and the sufficiency of its financial resources to absorb that impact.
Other forward-looking statements include statements which do not relate solely to historical facts, such as, without limitation, statements which discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. This release includes forecasts of unit cost and revenue performance, fuel prices and fuel hedging, capacity and traffic estimates, other income/expense estimates, share count, and statements regarding the Company’s liquidity, each of which is a forward-looking statement. Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations. The following factors, in addition to other possible factors not listed, could cause the Company’s actual results to differ materially from those expressed in forward-looking statements: the materially weakened financial condition of the Company, resulting from its significant losses in recent years; weak demand for air travel and lower investment asset returns resulting from the severe global economic downturn; the Company’s need to raise substantial additional funds and its ability to do so on acceptable terms; the potential requirement for the Company to maintain reserves under its credit cart processing agreements, which could materially adversely impact the Company’s liquidity; the ability of the Company to generate additional revenues and reduce its costs; continued high and volatile fuel prices and further increases in the price of fuel, and the availability of fuel; the resolution of pending litigation with certain global distribution systems and business discussions with certain on-line travel agents; the Company’s substantial indebtedness and other obligations; the ability of the Company to satisfy certain covenants and conditions in certain of its financing and other agreements; changes in economic and other conditions beyond the Company’s control, and the volatile results of the Company’s operations; the fiercely and increasingly competitive business environment faced by the Company; potential industry consolidation and alliance changes; competition with reorganized carriers; low fare levels by historical standards and the Company’s reduced pricing power; changes in the Company’s corporate or business strategy; extensive government regulation of the Company’s business; conflicts overseas or terrorist attacks; uncertainties with respect to the Company’s international operations; outbreaks of a disease (such as SARS, avian flu or the H1N1 virus) that affects travel behavior; labor costs that are higher than those of the Company’s competitors; uncertainties with respect to the Company’s relationships with unionized and other employee work groups; increased insurance costs and potential reductions of available insurance coverage; the Company’s ability to retain key management personnel; potential failures or disruptions of the Company’s computer, communications or other technology systems; losses and adverse publicity resulting from any accident involving the Company’s aircraft; interruptions or disruptions in service at one or more of the Company’s primary market airports; the heavy taxation of the airline industry; and changes in the price of the Company’s common stock. Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010.
Detailed financial information follows:
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
| Three Months Ended June 30, | Percent Change |
|||||||||||
| 2011 | 2010 | |||||||||||
| Revenues |
||||||||||||
| Passenger - American Airlines |
$ | 4,557 | $ | 4,279 | 6.5 | % | ||||||
| - Regional Affiliates |
711 | 600 | 18.5 | |||||||||
| Cargo |
187 | 170 | 9.6 | |||||||||
| Other revenues |
659 | 625 | 5.5 | |||||||||
| Total operating revenues |
6,114 | 5,674 | 7.8 | |||||||||
| Expenses |
||||||||||||
| Aircraft fuel |
2,202 | 1,655 | 33.1 | |||||||||
| Wages, salaries and benefits |
1,764 | 1,714 | 2.9 | |||||||||
| Other rentals and landing fees |
355 | 352 | 0.9 | |||||||||
| Maintenance, materials and repairs |
334 | 340 | (1.8 | ) | ||||||||
| Depreciation and amortization |
266 | 267 | (0.4 | ) | ||||||||
| Commissions, booking fees and credit card expense |
268 | 248 | 8.1 | |||||||||
| Aircraft rentals |
158 | 145 | 9.0 | |||||||||
| Food service |
133 | 121 | 9.9 | |||||||||
| Special charges |
— | — | * | |||||||||
| Other operating expenses |
712 | 636 | 11.9 | |||||||||
| Total operating expenses |
6,192 | 5,478 | 13.0 | |||||||||
| Operating Income (Loss) |
(78 | ) | 196 | * | ||||||||
| Other Income (Expense) |
||||||||||||
| Interest income |
7 | 6 | 16.7 | |||||||||
| Interest expense |
(215 | ) | (209 | ) | 2.8 | |||||||
| Interest capitalized |
10 | 8 | 24.0 | |||||||||
| Miscellaneous – net |
(10 | ) | (12 | ) | (16.7 | ) | ||||||
| (208 | ) | (207 | ) | 0.5 | ||||||||
| Loss Before Income Taxes |
(286 | ) | (11 | ) | * | |||||||
| Income tax |
— | — | — | |||||||||
| Net Loss |
$ | (286 | ) | $ | (11 | ) | * | |||||
| Loss Per Share |
||||||||||||
| Basic |
$ | (0.85 | ) | $ | (0.03 | ) | ||||||
| Diluted |
$ | (0.85 | ) | $ | (0.03 | ) | ||||||
| Number of Shares Used in Computation |
||||||||||||
| Basic |
335 | 333 | ||||||||||
| Diluted |
335 | 333 | ||||||||||
| * | Greater than 100% |
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
| Three Months Ended June 30, |
Percent | |||||||||||
| 2011 | 2010 | Change | ||||||||||
| American Airlines, Inc. Mainline Jet Operations |
||||||||||||
| Revenue passenger miles (millions) |
32,788 | 32,215 | 1.8 | |||||||||
| Available seat miles (millions) |
39,228 | 38,413 | 2.1 | |||||||||
| Cargo ton miles (millions) |
459 | 478 | (4.1 | ) | ||||||||
| Passenger load factor |
83.6 | % | 83.9 | % | (0.3) pts | |||||||
| Passenger revenue yield per passenger mile (cents) |
13.90 | 13.28 | 4.6 | |||||||||
| Passenger revenue per available seat mile (cents) |
11.62 | 11.14 | 4.3 | |||||||||
| Cargo revenue yield per ton mile (cents) |
40.76 | 35.67 | 14.2 | |||||||||
| Operating expenses per available seat mile, excluding Regional Affiliates (cents) (1) |
13.85 | 12.62 | 9.7 | |||||||||
| Fuel consumption (gallons, in millions) |
627 | 627 | 0.0 | |||||||||
| Fuel price per gallon (dollars) |
3.11 | 2.37 | 31.2 | |||||||||
| Regional Affiliates |
||||||||||||
| Revenue passenger miles (millions) |
2,585 | 2,230 | 15.9 | |||||||||
| Available seat miles (millions) |
3,412 | 2,994 | 14.0 | |||||||||
| Passenger load factor |
75.8 | % | 74.5 | % | 1.3 pts | |||||||
| AMR Corporation |
||||||||||||
| Average Equivalent Number of Employees |
||||||||||||
| American Airlines |
66,800 | 65,600 | ||||||||||
| Other |
13,700 | 12,700 | ||||||||||
| Total |
80,500 | 78,300 | ||||||||||
| (1) | Excludes $793 million and $662 million of expense incurred related to Regional Affiliates in 2011 and 2010, respectively. |
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
OPERATING STATISTICS BY REGIONAL ENTITY
American Airlines, Inc.
Entity Results
| Three Months Ended June 30, 2011 | ||||||||||||||||
| RASM1 (cents) |
Y-O-Y Change |
ASMs2 (billions) |
Y-O-Y Change |
|||||||||||||
| DOT Domestic |
11.74 | 4.9 | % | 23.2 | (1.0 | )% | ||||||||||
| International |
11.44 | 3.5 | 16.0 | 7.0 | ||||||||||||
| DOT Latin America |
12.75 | 17.0 | 7.2 | 0.2 | ||||||||||||
| DOT Atlantic |
10.83 | (4.7 | ) | 6.6 | 9.0 | |||||||||||
| DOT Pacific |
9.02 | (14.7 | ) | 2.3 | 27.4 | |||||||||||
American Airlines, Inc.
Entity Results
| Three Months Ended June 30, 2011 | ||||||||||||||||
| Load Factor (pts) |
Y-O-Y Change (pts) |
Yield (cents) |
Y-O-Y Change |
|||||||||||||
| DOT Domestic |
85.5 | (0.2 | ) | 13.73 | 5.1 | % | ||||||||||
| International |
80.8 | (0.2 | ) | 14.16 | 3.8 | |||||||||||
| DOT Latin America |
79.9 | 3.6 | 15.95 | 11.7 | ||||||||||||
| DOT Atlantic |
82.9 | (2.0 | ) | 13.07 | (2.3 | ) | ||||||||||
| DOT Pacific |
77.0 | (9.3 | ) | 11.72 | (4.3 | ) | ||||||||||
| 1 | Revenue per Available Seat Mile |
| 2 | Available Seat Miles |
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
American Airlines, Inc. Mainline Jet Operations
| Three Months Ended June 30, | ||||||||
| (in millions, except as noted) | 2011 | 2010 | ||||||
| Total operating expenses |
$ | 6,225 | $ | 5,510 | ||||
| Less: Operating expenses incurred related to Regional Affiliates |
793 | 662 | ||||||
| Operating expenses excluding expenses incurred related to Regional Affiliates |
$ | 5,432 | $ | 4,848 | ||||
| American mainline jet operations available seat miles |
39,228 | 38,413 | ||||||
| Operating expenses per available seat mile, excluding Regional Affiliates (cents) |
13.85 | 12.62 | ||||||
| Percent change |
9.7 | % | ||||||
| American Airlines, Inc. Mainline Jet Operations |
| |||||||
| Three Months Ended June 30, | ||||||||
| (in millions, except as noted) | 2011 | 2010 | ||||||
| Total operating expenses |
$ | 6,225 | $ | 5,510 | ||||
| Less: Operating expenses incurred related to Regional Affiliates |
793 | 662 | ||||||
| Operating expenses excluding expenses incurred related to Regional Affiliates |
$ | 5,432 | $ | 4,848 | ||||
| American mainline jet operations available seat miles |
39,228 | 38,413 | ||||||
| Operating expenses per available seat mile, excluding Regional Affiliates (cents) |
13.85 | 12.62 | ||||||
| Less: Impact of special items (cents) |
— | — | ||||||
| Operating expenses per available seat mile, excluding impact of special items (cents) |
13.85 | 12.62 | ||||||
| Percent change |
9.7 | % | ||||||
| Less: Fuel cost per available seat mile (cents) |
4.97 | 3.87 | ||||||
| Operating expenses per available seat mile, excluding impact of special items and the cost of fuel (cents) |
8.88 | 8.75 | ||||||
| Percent change |
1.4 | % | ||||||
Note: The Company believes that operating expenses per available seat mile, excluding the cost of fuel and special items assists investors in understanding the impact of fuel prices and special items on the Company’s operations.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
AMR Corporation
| Three Months Ended June 30, | ||||||||
| 2011 | 2010 | |||||||
| Operating expenses per available seat mile (cents) |
$ | 14.52 | $ | 13.23 | ||||
| Less: Impact of special items (cents) |
— | — | ||||||
| Operating expenses per available seat mile (cents) |
14.52 | 13.23 | ||||||
| Percent change |
9.8 | % | ||||||
| Less: Fuel cost per available seat mile (cents) |
5.16 | 4.00 | ||||||
| Operating expenses per available seat mile, excluding impact of special items and the cost of fuel (cents) |
9.36 | 9.23 | ||||||
| Percent change |
1.4 | % | ||||||
Note: The Company believes that operating expenses per available seat mile, excluding the cost of fuel and special items assists investors in understanding the impact of fuel prices and special items on the Company’s operations.
AMR Corporation
Calculation of Net Debt
| As of June 30 | ||||||||
| (in millions) | 2011 | 2010 | ||||||
| Current and long-term debt |
$ | 11,169 | $ | 10,869 | ||||
| Current and long-term capital lease obligations |
713 | 628 | ||||||
| Principal amount of certain airport facility tax-exempt bonds and the present value of aircraft operating lease obligations |
5,218 | 4,588 | ||||||
| 17,100 | 16,085 | |||||||
| Less: Unrestricted cash and short-term investments |
5,176 | 5,084 | ||||||
| Net Debt |
$ | 11,924 | $ | 11,001 | ||||
Note: The Company believes the net debt metric assists investors in understanding changes in the Company’s liquidity and the results of its efforts to build a financial foundation under the Company’s Turnaround Plan.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
American Airlines, Inc. Mainline Jet Operations
| Three Months Ended September 30, | ||||||||
| 2011 (Estimate)1 | 2010 (Actual) | |||||||
| Operating expenses per available seat mile, excluding Regional Affiliates (cents) |
13.80 | 12.20 | ||||||
| Less: Impact of special items (cents) |
— | — | ||||||
| Operating expenses per available seat mile, excluding Regional Affiliates and impact of special items (cents) |
13.80 | 12.20 | ||||||
| Percent change |
13.1 | % | ||||||
| Less: Fuel expense per available seat mile (cents) |
4.99 | 3.61 | ||||||
| Operating expenses per available seat mile, excluding Regional Affiliates, impact of special items and fuel expense (cents) |
8.81 | 8.59 | ||||||
| Percent change |
2.6 | % | ||||||
American Airlines, Inc. Mainline Jet Operations
| Year Ended December 31, | ||||||||
| 2011 (Estimate)1 | 2010 (Actual) | |||||||
| Operating expenses per available seat mile, excluding Regional Affiliates (cents) |
13.77 | 12.62 | ||||||
| Less: Impact of special items (cents) |
0.02 | 0.05 | ||||||
| Operating expenses per available seat mile, excluding Regional Affiliates and impact of special items (cents) |
13.75 | 12.57 | ||||||
| Percent change |
9.4 | % | ||||||
| Less: Fuel expense per available seat mile (cents) |
4.83 | 3.74 | ||||||
| Operating expenses per available seat mile, excluding Regional Affiliates, impact of special items and fuel expense (cents) |
8.92 | 8.83 | ||||||
| Percent change |
1.0 | % | ||||||
| 1 | CASM and ex-fuel CASM guidance reconciliations represent the mid-point of the guidance provided in the earnings release |
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
AMR Corporation
| Three Months Ended September 30, | ||||||||
| 2011 (Estimate)1 | 2010 (Actual) | |||||||
| Operating expenses per available seat mile (cents) |
14.45 | 12.75 | ||||||
| Less: Impact of special items (cents) |
— | — | ||||||
| Operating expenses per available seat mile, excluding impact of special items (cents) |
14.45 | 12.75 | ||||||
| Percent change |
13.3 | % | ||||||
| Less: Fuel expense per available seat mile (cents) |
5.19 | 3.74 | ||||||
| Operating expenses per available seat mile, excluding impact of special items and fuel expense (cents) |
9.26 | 9.01 | ||||||
| Percent change |
2.8 | % | ||||||
| AMR Corporation |
||||||||
| Year Ended December 31, | ||||||||
| 2011 (Estimate)1 | 2010 (Actual) | |||||||
| Operating expenses per available seat mile (cents) |
14.44 | 13.22 | ||||||
| Less: Impact of special items (cents) |
0.02 | 0.05 | ||||||
| Operating expenses per available seat mile, excluding impact of special items (cents) |
14.42 | 13.17 | ||||||
| Percent change |
9.5 | % | ||||||
| Less: Fuel expense per available seat mile (cents) |
5.03 | 3.87 | ||||||
| Operating expenses per available seat mile, excluding impact of special items and fuel expense (cents) |
9.39 | 9.30 | ||||||
| Percent change |
1.0 | % | ||||||
| AMR Corporation |
||||||||
| Three Months Ended June 30, | ||||||||
| (in millions, except as noted) | 2011 | 2010 | ||||||
| Net Loss |
(286 | ) | (11 | ) | ||||
| Less: Impact of special items |
— | — | ||||||
| Net Loss, excluding impact of special items |
(286 | ) | (11 | ) | ||||
| Loss Per Share |
||||||||
| Basic |
(0.85 | ) | (0.03 | ) | ||||
| Diluted |
(0.85 | ) | (0.03 | ) | ||||
| 1 | CASM and ex-fuel CASM guidance reconciliations represent the mid-point of the guidance provided in the earnings release |
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
| Six Months Ended June 30, | Percent Change |
|||||||||||
| 2011 | 2010 | |||||||||||
| Revenues |
||||||||||||
| Passenger - American Airlines |
$ | 8,691 | $ | 8,110 | 7.2 | % | ||||||
| - Regional Affiliates |
1,288 | 1,098 | 17.4 | |||||||||
| Cargo |
356 | 324 | 9.8 | |||||||||
| Other revenues |
1,312 | 1,210 | 8.4 | |||||||||
| Total operating revenues |
11,647 | 10,742 | 8.4 | |||||||||
| Expenses |
||||||||||||
| Aircraft fuel |
4,044 | 3,131 | 29.2 | |||||||||
| Wages, salaries and benefits |
3,486 | 3,417 | 2.0 | |||||||||
| Other rentals and landing fees |
707 | 704 | 0.4 | |||||||||
| Maintenance, materials and repairs |
639 | 691 | (7.5 | ) | ||||||||
| Depreciation and amortization |
542 | 534 | 1.5 | |||||||||
| Commissions, booking fees and credit card expense |
524 | 482 | 8.7 | |||||||||
| Aircraft rentals |
318 | 274 | 16.1 | |||||||||
| Food service |
253 | 236 | 7.2 | |||||||||
| Special charges |
— | — | * | |||||||||
| Other operating expenses |
1,443 | 1,375 | 4.9 | |||||||||
| Total operating expenses |
11,956 | 10,844 | 10.3 | |||||||||
| Operating Loss |
(309 | ) | (102 | ) | * | |||||||
| Other Income (Expense) |
||||||||||||
| Interest income |
14 | 11 | 25.6 | |||||||||
| Interest expense |
(415 | ) | (418 | ) | (0.6 | ) | ||||||
| Interest capitalized |
17 | 18 | (6.4 | ) | ||||||||
| Miscellaneous – net |
(29 | ) | (25 | ) | 16.0 | |||||||
| (413 | ) | (414 | ) | (0.2 | ) | |||||||
| Loss Before Income Taxes |
(722 | ) | (516 | ) | 39.9 | |||||||
| Income tax |
— | — | — | |||||||||
| Net Loss |
$ | (722 | ) | $ | (516 | ) | 39.9 | |||||
| Loss Per Share |
||||||||||||
| Basic |
$ | (2.16 | ) | $ | (1.55 | ) | ||||||
| Diluted |
$ | (2.16 | ) | $ | (1.55 | ) | ||||||
| Number of Shares Used in Computation |
||||||||||||
| Basic |
334 | 333 | ||||||||||
| Diluted |
334 | 333 | ||||||||||
| * | Greater than 100% |
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
| Six Months Ended June 30, | Percent Change |
|||||||||||
| 2011 | 2010 | |||||||||||
| American Airlines, Inc. Mainline Jet Operations |
||||||||||||
| Revenue passenger miles (millions) |
61,953 | 60,916 | 1.7 | |||||||||
| Available seat miles (millions) |
77,078 | 75,259 | 2.4 | |||||||||
| Cargo ton miles (millions) |
898 | 925 | (3.0 | ) | ||||||||
| Passenger load factor |
80.4 | % | 80.9 | % | (0.6 | ) pts | ||||||
| Passenger revenue yield per passenger mile (cents) |
14.03 | 13.31 | 5.4 | |||||||||
| Passenger revenue per available seat mile (cents) |
11.28 | 10.78 | 4.6 | |||||||||
| Cargo revenue yield per ton mile (cents) |
39.66 | 35.04 | 13.2 | |||||||||
| Operating expenses per available seat mile, excluding Regional Affiliates (cents) (1) |
13.63 | 12.76 | 6.8 | |||||||||
| Fuel consumption (gallons, in millions) |
1,224 | 1,225 | (0.1 | ) | ||||||||
| Fuel price per gallon (dollars) |
2.93 | 2.30 | 27.6 | |||||||||
| Regional Affiliates |
||||||||||||
| Revenue passenger miles (millions) |
4,720 | 4,093 | 15.3 | |||||||||
| Available seat miles (millions) |
6,567 | 5,767 | 13.9 | |||||||||
| Passenger load factor |
71.9 | % | 71.0 | % | 0.9 pts | |||||||
| AMR Corporation |
||||||||||||
| Average Equivalent Number of Employees |
||||||||||||
| American Airlines |
66,250 | 65,500 | ||||||||||
| Other |
13,500 | 12,550 | ||||||||||
| Total |
79,750 | 78,050 | ||||||||||
| (1) | Excludes $1.5 billion and $1.3 billion of expense incurred related to Regional Affiliates in 2011 and 2010, respectively. |
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
OPERATING STATISTICS BY REGIONAL ENTITY
American Airlines, Inc.
Entity Results
| Six Months Ended June 30, 2011 | ||||||||||||||||
| RASM1 (cents) |
Y-O-Y Change |
ASMs2 (billions) |
Y-O-Y Change |
|||||||||||||
| DOT Domestic |
11.32 | 5.5 | % | 46.0 | (0.6 | )% | ||||||||||
| International |
11.21 | 3.3 | 31.1 | 7.3 | ||||||||||||
| DOT Latin America |
12.70 | 11.3 | 15.3 | 5.0 | ||||||||||||
| DOT Atlantic |
10.07 | (3.5 | ) | 11.6 | 4.6 | |||||||||||
| DOT Pacific |
8.98 | (9.3 | ) | 4.3 | 25.4 | |||||||||||
| 1 | Revenue per Available Seat Mile |
| 2 | Available Seat Miles |
American Airlines, Inc.
Entity Results
| Six Months Ended June 30, 2011 | ||||||||||||||||
| Load Factor (pts) |
Y-O-Y Change (pts) |
Yield (cents) |
Y-O-Y Change |
|||||||||||||
| DOT Domestic |
82.0 | (0.3 | ) | 13.81 | 6.0 | % | ||||||||||
| International |
78.0 | (0.7 | ) | 14.37 | 4.3 | |||||||||||
| DOT Latin America |
79.9 | 2.4 | 15.88 | 8.0 | ||||||||||||
| DOT Atlantic |
76.2 | (2.5 | ) | 13.22 | (0.1 | ) | ||||||||||
| DOT Pacific |
76.2 | (8.0 | ) | 11.79 | 0.2 | |||||||||||
###
Current AMR Corp. releases can be accessed on the Internet.
The address is http://www.aa.com
Exhibit 99.2
| CONTACT: | Andrew Backover | |
| Corporate Communications | ||
| Fort Worth, Texas | ||
| 817-967-1577 | ||
| mediarelations@aa.com |
FOR RELEASE: Wednesday, July 20, 2011
AMR CORPORATION ANNOUNCES LARGEST AIRCRAFT ORDER IN HISTORY WITH
BOEING AND AIRBUS
American Airlines to Order 460 Narrowbody Jets to Replace and Transform its Fleet
American expects to create youngest, most fuel-efficient fleet among
U.S. industry peers in approximately five years
Agreement includes options and purchase rights for 465 additional
aircraft through 2025
American to be first network carrier to take delivery of Airbus A320neo Family aircraft and
first airline to commit to Boeing’s expected new 737 family offering
FORT WORTH, Texas — AMR Corporation, the parent company of American Airlines and American Eagle, today announced landmark agreements with Airbus and Boeing that will allow it to replace and transform American’s narrowbody fleet over five years and solidify its fleet plan into the next decade. These new aircraft will allow American to reduce its operating and fuel costs and deliver state-of-the-art amenities to customers, while maximizing financial flexibility for the Company.
Under the new agreements, American plans to acquire 460 narrowbody, single-aisle aircraft from the Boeing 737 and Airbus A320 families beginning in 2013 through 2022 – the largest aircraft order in aviation history. As part of these agreements, starting in 2017 American will become the first network U.S. airline to begin taking delivery of “next generation” narrowbody aircraft that will further accelerate fuel-efficiency gains.
These new deliveries are expected to pave the way for American to have the youngest and most fuel-efficient fleet among its U.S. airline peers in approximately five years.
American also will benefit from approximately $13 billion of committed financing provided by the manufacturers through lease transactions that will help maximize balance sheet flexibility and reduce risk. The financing fully covers the first 230 deliveries.
Gerard Arpey, Chairman and CEO of AMR and American Airlines, noted that today’s order represents another important step in the Company’s strategy to build a strong foundation for the future.
“We have a long track record of meeting our obligations to all of our stakeholders, including strategic partners, lenders, suppliers and investors. We believe this history continues to help us navigate today’s challenges while remaining focused on doing what’s necessary to position American Airlines for long-term success, and we look forward to working with Boeing and Airbus to achieve it,” Arpey said. “Today’s announcement paves the way for us to achieve important milestones in our company’s future, giving us the ability to replace our narrowbody fleet and finance it responsibly. This was an incredible opportunity for our company that presented itself from two great manufacturers. And, given our aggressive and ambitious fleet plans, we feel fortunate to have both Boeing and Airbus standing beside us to meet our needs. With today’s news, we expect to have the youngest and most fuel-efficient fleet among our peers in the U.S. industry within five years. This new fleet will dramatically improve our fuel and operating costs, while enhancing our financial flexibility. More than that, with the power of our network and partnerships and the dedication of our people, we will be an even stronger competitor.”
Said Tom Horton, President of AMR and American Airlines: “Our efforts in recent years have transformed nearly every corner of our business. We’ve strengthened our liquidity, focused our network and alliance relationships on serving the world’s most important markets with the best partners, enhanced our products and services with industry-leading technology, and worked to improve the customer experience. Today’s announcement will accelerate this transformation, delivering important benefits to our shareholders, customers and employees.”
Under the agreement with Boeing, American plans to acquire a total of 200 additional aircraft from the 737 family, with options for another 100 737 family aircraft. American has the flexibility to convert the new deliveries into variants within the 737 family, including the 737-700, 737-800 and 737-900ER.
As part of the Boeing agreement, American will take delivery of 100 aircraft from Boeing’s current 737NG family starting in 2013, including three 737-800 options that had been exercised as of July 1, 2011. American also intends to order 100 of Boeing’s expected new evolution of the 737NG, with a new engine that would offer even more significant fuel-efficiency gains over today’s models. American is pleased to be the first airline to commit to Boeing’s new 737 family offering, which is expected to provide a new level of economic efficiency and operational performance, pending final confirmation of the program by Boeing. This airplane would be powered by CFM International’s LEAP-X engine.
American’s most recent deliveries of the 737-800, with 160 seats, include the all-new Boeing Sky Interior, offering larger overhead bins that pivot down and out similar to those on the 787 Dreamliner, a contemporary feeling of spaciousness and variable LED lighting options for cabin ambience.
“We are pleased to continue our long and successful partnership with American Airlines,” said Jim Albaugh, President and CEO of Boeing Commercial Airplanes. “While the 737 family will continue to serve an important role in American’s narrowbody fleet — delivering customer and cost benefits in both its current form and future evolution — as American’s primary widebody partner, we are excited to deliver to its customers all of the benefits and cutting-edge technology of the Boeing 787 Dreamliner and the 777-300ER. We look forward to strengthening our partnership for the future.”
American also will acquire a total of 260 Airbus aircraft from the A320 Family and will have 365 options and purchase rights for additional aircraft. American has the flexibility to convert its delivery positions into variants within the A320 Family, including the A319 and A321.
American will take delivery of 130 current-generation Airbus A320 Family aircraft beginning in 2013. Beginning in 2017 American will begin taking delivery of 130 aircraft from the A320neo (New Engine Option) Family featuring next-generation engine technology. The new aircraft are approximately 15 percent more fuel efficient than today’s models. American will be the first network airline in the U.S. to deploy this new-technology aircraft.
The A320 Family features cabin interiors with increased overhead storage, reduced noise and ambient lighting options.
“American’s order represents a strong vote of confidence in our product in the important North American market, and we feel certain our A320 Family aircraft will help the American team deliver a great experience for customers while helping the airline to achieve cost efficiencies that will benefit its shareholders,” said Airbus President and CEO Tom Enders. “We are proud to renew our partnership with a company that has a long history of airline industry leadership.”
Cost Reduction, Simplification and Flexibility for the Future
The 737 and A320 families offer significant cost reduction opportunities in replacing American’s older fleet. For example, Boeing and Airbus aircraft in the 737 and A320 families offer a 35 percent reduction in fuel cost per seat versus the MD-80 and a 12 percent and 15 percent fuel cost reduction per seat, respectively, versus the 757 and 767-200.
The agreements with Boeing and Airbus will continue American’s fleet simplification efforts, allowing American to transition four fleet types (MD-80, 737-800, 757 and 767-200) to two (the 737 and the A320 families, which offer significant commonality benefits within each family).
With a total of 465 options and purchase rights for additional aircraft from both manufacturers through 2025, these agreements give American the flexibility for replacement as well as growth opportunities under the right economic and financial conditions, with the ability to acquire up to 925 aircraft in total over 12 years.
Beyond today’s announcement, American continues to execute on other elements of a comprehensive fleet renewal plan that will deliver customer benefits in a range of aircraft types and sizes.
In 2009 and 2010, American took delivery of 76 737-800s. Separate from today’s announcement, American has taken or is scheduled to take delivery of a total of 54 737-800s from 2011 into 2013. American also has firm orders for eight Boeing 777-300ER widebody aircraft to be delivered in 2012-2013. American is the first U.S. airline to order the 777-300ER, which will offer many operational and customer benefits while serving as the flagship of American’s modernized fleet.
In addition, American has plans to acquire 42 state-of-the-art Boeing 787 Dreamliners, to be delivered starting in late 2014, with options for 58 additional 787s. American also has firm orders for seven 777-200 widebody aircraft scheduled for delivery in 2013 through 2016.
“While our network is our core product, designed to take our customers where they most want to go, our fleet is a critical element of our ability to deliver a superior travel experience, safely, reliably and comfortably,” said Virasb Vahidi, American’s Chief Commercial Officer, who leads American’s fleet and network planning and strategy. “With today’s announcement, I am confident that we will be able to meet our customers’ needs for decades to come with a modern fleet that will be second to none.”
American was advised in the transaction by SkyWorks Capital, LLC.
AMR and American Airlines President Tom Horton and Senior Vice President and Chief Financial Officer Bella Goren will make a presentation regarding American’s fleet transaction during a teleconference on Wednesday, July 20, at 8:30am EDT. To listen to the presentation, call 612-326-1011, and enter the passcode: AMR. The presentation and teleconference also can be accessed at the Investor Relations site of AA.com.
Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company’s expectations or beliefs concerning future events. When used in this release, the words “expects,” “estimates,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe our objectives, plans or goals, or actions we may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company’s intentions and expectations regarding acquisitions and financings of aircraft, and the benefits to the Company thereof. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations. Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010 and Report on Form 10-Q for the quarter ending June 30, 2011.
###
Current AMR Corp. releases can be accessed on the Internet.
The address is http://www.aa.com
 AMR
Reaches Transformational
Agreements
July 2011
Exhibit 99.3 |
 Please note that many of our statements will constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
which constitute the Company's expectations or beliefs concerning future events.
These matters are subject to a number
of
factors
that
could
cause
actual
results
to
differ
from
our
expectations.
These
factors
include,
but
are
not
limited
to,
domestic
and
international
economic
conditions;
fuel
prices;
general
competitive
factors
including,
but,
not
limited to, government regulations and regulatory approvals; uncertainty in
domestic or international operations; potential
industry
consolidation
and
alliance
changes;
outbreaks
of
a
disease
(such
as
the
H1N1
virus,
SARS
or
avian
flu)
that
affects
travel
behavior;
acts
of
war
or
terrorism;
our
ability
to
access
the
capital
markets;
and
changes
in
the
Company's business strategy, any of which could affect our actual results.
Additional information concerning these and other factors is contained in our
Securities and Exchange Commission filings,
including
but
not
limited
to
our
annual
report
on
Form
10-K
for
the
year
ended
December
31,
2010
and
our
quarterly report on Form 10-Q for the quarter ended March 31, 2011.
2
Safe Harbor |
 |
 •
The foundation of our network strategy
Our Cornerstones
4 |
 Landmark Deal
Under FlightPlan 2020 |
 •
Our historic Boeing and Airbus deals turbocharge our fleet
renewal
–
By YE2012, the 737-800 fleet planned to outnumber our MD80 fleet
6
Substantially Enhances Our Fleet Plan
1
54 existing orders prior to today’s announcements
|
 •
Landmark deals rapidly transform American’s fleet
7
Transformational Fleet Renewal
Existing Orders
New Orders
Options
First Delivery
B737-8
54
-
-
2011
B737 Family
-
100
40
2013
B737 Family (new)
-
100
60
TBD
Total Boeing
54
200
100
A320 Family
-
130
85
2013
A320 Family NEO
-
130
280
2017
Total Airbus
-
260
365
Grand Total
54
460
465 |
 8
Dramatically Reduces Fleet Age
Source: Ascend; based on currently available/published Fleet Plans
~ 33% |
 •
Gain significant flexibility with six variants across two aircraft
families
9
Simplification Impact
MD80
B737 Family
Today
Future
Common Features:
•
Cockpit
•
Engine
•
Parts
B738
B757
B762
A320 Family |
 •
Fleet transformation drives substantial fuel efficiency gains
•
New technology expected to deliver up to 15% additional savings
10
Enhanced Fuel Efficiency
Note: Percentages in the chart reflect average savings vs. current MD80, B757 and
B762 on a per seat basis versus 737 / A320 family aircraft with similar size
and configuration ~35%
~12%
~15%
vs. MD80
vs. B767-200
vs. B757-200 |
 •
With this unprecedented order, American will be the first US
network airline to take delivery of new engine, narrowbody
aircraft
11
Positioning for Long-term Success
1
Boeing has not confirmed delivery dates
570 Orders and Options |
 •
Large narrowbodies provide flexibility to serve:
12
Capture
Enhanced
Opportunities
in
Marketplace
•
Transcontinental markets
•
High-demand routes
•
Slot-constrained airports
737-900ER current/new
A321 current/neo |
 13
•
Typical Domestic markets
•
Short-haul Latin markets
•
Caribbean markets
737-800NG current/new
A320 current/neo
•
Mid-gauge aircraft allow American to serve:
Capture
Enhanced
Opportunities
in
Marketplace |
 14
•
Secondary Domestic markets
•
Select
markets
in
Latin
America
•
High-altitude or short-runway
airports
737-700 current/new
A319 current/neo
•
Small narrowbodies, a new addition to our fleet, enable us to
serve:
Capture Enhanced Opportunities in Marketplace |
 15
Exceptional Customer Experience
Customer-friendly
Interior
Spacious cabin
Improved Customer
Comfort
High-impact In-flight
Entertainment
LED lighting |
 •
Maximizes balance sheet flexibility while reducing risk
16
~$13 Billion in Financing |
 17
Firm Orders Forecast to Generate NPV ~$1.5 B
•
Enhanced revenue opportunities
•
Fuel cost savings
•
Other operating efficiencies
1/
•
Financing benefits
•
~$3.3M NPV forecast per firm aircraft
1/
Net of transition costs |
 18
Fly Profitably
Financing
Fleet
Improved Operating Economics
Customer Benefits
•
Lease financing of ~$13B
•
Significant operating cost savings
•
Alleviates burden on balance sheet
•
B737 and A320 families are ~35%
more fuel efficient than MD80
•
Future technology expected to be
up to 15% more fuel efficient than
current Boeing and Airbus aircraft
•
New look interiors
•
Slim line seats
•
Improved operating performance
•
More overhead compartment space
•
In-flight entertainment and Wi-Fi
•
First Boeing new evolution and
Airbus NEO production slots of
network US carriers
•
Youngest aircraft fleet of US
network carriers by 2017 |
 19
FlightPlan 2020: Compete to Win
Restructured
Domestic
Network
Expanded
one
Membership
Launched
Joint
Business
with
JAL
Launched
Trans-Atlantic
Joint Business
Accelerated
Fleet Renewal
Enhanced
Product
Offering with
“Your Choice”
world |
Exhibit 99.4
| CONTACT: | Sean Collins | |
| Corporate Communications | ||
| Fort Worth, Texas | ||
| 817-967-1577 | ||
| mediarelations@aa.com |
FOR RELEASE: Wednesday, July 20, 2011
AMR CORPORATION ANNOUNCES INTENT TO MOVE FORWARD
WITH THE DIVESTITURE OF AMERICAN EAGLE
FORT WORTH, Texas - AMR Corporation, the parent company of American Airlines, Inc., announced today its intent to move forward with the divestiture of AMR Eagle Holding Corporation (“Eagle”). AMR currently expects the divestiture to take the form of a spin-off of Eagle stock to the shareholders of AMR.
“We believe that a divestiture of Eagle would be in the best interests of AMR and Eagle, as well as our shareholders, customers and employees,” said AMR Chairman and CEO Gerard Arpey. “Strategically for AMR, it would be beneficial, as we could, over time, diversify our regional feed with additional regional airlines to ensure we have access to the most competitive rates and service. A divestiture could provide Eagle an opportunity to vie for business of other mainline carriers and allow the carrier to grow. I am proud of the accomplishments of American and Eagle as a combined group of companies under AMR for the past 26 years, and I look forward to their future, independent successes.”
“For everyone here at Eagle, our highest priority will be to continue operating safely and reliably for all of our customers – and earning American’s business every day,” said Dan Garton, President and CEO of AMR Eagle and American Eagle Airlines. “We are excited about today’s announcement and the opportunities for growth that would be available to us as an independent carrier. We’re eager to take on those new challenges.”
As part of the process of preparing for a potential spin-off of Eagle, in August AMR Eagle Holding Corporation expects to file a Registration Statement on Form 10 with the Securities and Exchange Commission related to the intended divestiture. The Registration Statement on Form 10 will describe the divestiture and will contain important information about Eagle, including its historical consolidated financial statements.
A specific time frame for the divestiture has not been announced. The company currently envisions the divestiture as a spin-off, however, it remains open to other options, including a sale, as the transaction moves forward.
Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company’s expectations or beliefs concerning future events. When used in this release, the words “expects” “estimates,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook” “may,” “will,” “should” “seeks” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe our objectives, plans or goals, or actions we may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company’s intentions and expectations regarding a potential divestiture of Eagle. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations. Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010 and Report on Form 10-Q for the quarter ending June 30, 2011.
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