American Airlines parent AMR Corp., the focus of a takeover bid by US Airways Group Inc., narrowed its fourth-quarter loss to $88 million while paring labor and aircraft-leasing costs in bankruptcy.
Including a gain on special items of $350 million, AMR posted net income of $262 million, or 69 cents a share, the Fort Worth, Texas-based company said in a statement Wednesday. The year-earlier net loss of $1.1 billion, or $3.27 a share, included $886 million in bankruptcy expenses.
American and its creditors have been evaluating for months whether the carrier should combine with US Airways or exit court protection on its own. A resolution should come in “a matter of weeks,” Chief Executive Officer Tom Horton said on Jan. 3. AMR sought Chapter 11 bankruptcy in November 2011.
“We are completing our evaluation of whether a merger is the right step for American at this time,” Horton told employees in an e-mail. “Whatever the decision, customers, investors and our people will benefit from the new American’s exceptional strengths.”
A combination of American, the third-biggest U.S. carrier, and No. 5 US Airways would surpass United Continental Holdings Corp. as the world’s biggest airline, based on passenger traffic.
Expenses fell 12 percent, helped by a 13 percent drop in labor costs. American’s unions agreed last year to changes that will reduce annual spending by $1.06 billion. The airline also renegotiated financing terms for more than 400 aircraft and restructured facility leases and vendor agreements.
“The financial restructuring effectively is complete,” Horton, who declined to discuss the proposed merger, said in an interview. “We’re really feeling quite good about that.”
The company’s loss a year earlier, excluding restructuring costs, was $209 million.
AMR ended the quarter with $4.7 billion in cash and short- term investments, including $850 million in cash dedicated to specific uses. AMR shares, which trade over the counter, rose 4.7 percent to $1.56 at 10:47 a.m. in New York.
The fourth quarter included a $569 million non-cash income tax benefit, a $280 million gain from settlement of a commercial dispute, and costs of $441 million linked to the restructuring and $58 million for severance, AMR said.
Profit was reduced $142 million by Hurricane Sandy, a November snowstorm and reduced bookings after a drop in on-time flights and reports of loose seats on planes. Altogether, those items pared revenue by $155 million.
Sales dropped less than 1 percent to $5.94 billion, in the quarter and reached a record $24.9 billion for the full year, AMR said.
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