The parent of American Airlines, the nation’s largest carrier, reported Wednesday a sharply higher profit for the second quarter, helped by full airplanes and higher fares at the start of the peak summer travel season.
It was only AMR Corp.’s second profitable quarter — excluding those helped by one-time items — in the past five years, and its best April-June period since 1998.
AMR said it earned $291 million, or $1.14 per share, in the three months ended June 30, up from $58 million, or 30 cents a share, a year ago. The latest results matched the forecast of analysts surveyed by Thomson Financial.
Revenue rose 12.5 percent to $5.98 billion from $5.31 billion a year ago and slightly higher than the $5.93 billion that analysts had expected.
That boost in revenue was enough to offset high fuel prices. American and its regional affiliate, American Eagle, spent $374 million more on fuel than it would have spent at mid-2005 prices.
American has been culling gas-guzzling planes in its fleet and taking other cost-cutting steps. American, along with other major carriers, has also pushed through several fare increases.
“We are pleased to have earned a quarterly profit — just our second in the last 22 quarters without the benefit of special items,” Chairman and Chief Executive Gerard Arpey said in a statement. “Our performance indicates very clearly that we are on the right track, but also demonstrates — just as clearly — that we have more work to do to return our company to financial health.”
Arpey said high fuel costs remain a major roadblock, along with the growth of competition from low-cost airlines and those who used the bankruptcy process to cut costs.
American’s planes flew fuller in the second quarter, averaging 82.6 percent occupancy, compared to 79.5 percent a year earlier.
The company also boosted its revenue as a factor of capacity by 11.7 percent, faster than the 8.5 percent increase in costs by capacity.
The second quarter is traditionally a strong one for airlines, as leisure travelers head out on vacation. Arpey said the company would need to sharpen its performance to remain profitable the rest of the year.
AMR spent $3.18 billion on fuel in the first six months of the year, a 29.9 percent increase, far outstripping modest hikes in wages, salaries and benefits, which are a slightly larger share of the Fort Worth-based company’s expenses.
American paid more than $2.09 per gallon for fuel in the quarter, up from $1.63 a year ago.
AMR increased its cash and short-term investments to more than $5.1 billion, excluding restricted balances. The buildup is a legacy of the company’s brush with bankruptcy in 2003.