American Airlines quarterly losses soar close to £300m

War on terrorism
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The Independent Online

American Airlines, the world's biggest airline, yesterday reported a record quarterly net loss of $414m (£292m) as air travel came almost to a halt after last month's US terrorist attacks, in which two of its planes were hijacked.

"With the economy weak and fuel prices still relatively high, we and the rest of the industry were experiencing a very difficult financial quarter even before the September 11 attacks," said Don Carty, chairman and chief executive of AMR, the corporate parent of American Airlines. "But the attacks and their aftermath further weakened traffic and had a staggering effect on our overall financial performance."

American Airlines said the third-quarter results included $397m in special charges for the 11 September attacks, and the loss came despite a credit of $508m from US government in emergency aid for the industry. The Merrill Lynch analyst, Michael Linenberg, said he expects a bigger loss in the fourth quarter of $815m.

Separately, Europe's beleaguered aviation industry was told it must react to the aftermath of the terrorist attacks by merging rather than appealing for bailouts. Patricia Hewitt, the Secretary of State for Trade and Industry, said faster consolidation would benefit both consumers and the wider European economy.

"Recent events must not be used as a smokescreen to prop up airlines that were in trouble anyway," she said in a speech at the British Embassy in Spain. "State aid should not prop up industries that are uncompetitive."

Although this had been government policy before the terror attacks on New York and Washington, advisers at the DTI admitted the comment had "greater resonance" now.

Meanwhile, at bmi British Midland an innovative agreement was announced whereby its pilots can job share for the first time. It is thought that no other European carrier offers such a deal to pilots and it is hoped it will save the jobs of many of the 109 pilots.