American makes fourth annual loss

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The Independent Online
AMERICAN Airlines, the industry-leading US carrier, lost money for the fourth year running in 1993, the result of tough competition and a costly strike in the final quarter of the year.

American's chief executive, Robert Crandall, announcing unexpectedly heavy losses for the fourth quarter, said the five-day strike by flight attendants in November cost it some dollars 190m, dollars 30m more than originally estimated.

The airline lost dollars 253m, or dollars 3.55 a share, in the final quarter, giving it an operating loss for the year of dollars 110m, or dollars 2.23. The loss for 1993 was double Wall Street's expectations, and brings its losses since 1989 to dollars 1.34bn.

The impact of the strike, which ended with US government intervention, 'turned the profit we had generated earlier in the year into a loss for the year as a whole,' Mr Crandall said. The final quarter results included a one-off charge of dollars 62m to cover settlement costs.

Despite promising sales during the first nine months of the year, annual revenue was only dollars 12.8bn, an increase of only 10 per cent over 1992's dismal results. Mr Crandall promised that the airline's management would do all it could to develop the spirit of co-operation with the carrier's trade unions.

American's principal US rival, United Airlines, recently agreed to a buyout plan that will give its employees majority ownership of the carrier later this year. American's shares fell 75 cents to dollars 69.125 on the disappointing news.