Company Watch - American Airlines.

Oct 1, 2007

American Airlines' shares could rise 50 percent or more in the next year according to a Barron's report that cited factors such as a potential unit spin-off and an improving balance sheet. Sep 28, 2007

American Airlines has floated a proposal to let its pilots fly more regularly scheduled hours, and to let pilots volunteer to fly another 15 hours per month over that. "This provides voluntary opportunities for pilots to increase their earnings," said a spokeswoman for the carrier. "And it gives us the ability to boost our efficiency and be more competitive." Sep 27, 2007

Senator wants to lengthen recall time for American's flight attendants. Sen. Claire McCaskill, D-Mo., wants to add to the FAA reauthorization bill language to extend the recall time for American Airlines flight attendants from five to 10 years. Susan Gordon, a spokeswoman for American Airlines, said the airline was bound by its union contract to keep the attendants on the furlough list for five years. "We are open to discussing with the APFA the legislation and any potential impact it might have on their members," she said. Sep 27, 2007

American Airlines parent AMR Corp. projected in a regulatory filing that third-quarter unit revenue will increase 3.7%-4.7%, surprising Wall Street analysts who had predicted growth of more than 5% and causing AMR's stock price to fall more than 14% yesterday. It marked the company's largest single-day share price drop since 2003. Sep 25, 2007

American Airlines parent AMR had expected to post third-quarter unit revenue growth of 5.2 percent. The weak figures, which come amid concerns that American consumers will rein in spending as the US economy slows, dragged down other airline shares. Delta Air Lines dropped about 6 percent, while US Airways fell over 8 percent. The Amex airline index was down 4.25 percent. On top of the prospects for softer demand, oil prices, which affect the cost of jet fuel, have recently reached record levels. In the filing with the US Securities and Exchange Commission, AMR said it expects third-quarter cargo and other revenue to be "nearly flat" with the second quarter. It also expects unit costs, or the cost of flying a seat one mile, to be higher than previously forecast because of programs to spruce up its cabins and due to weather-related cancellations. Sep 25, 2007

American Airlines parent AMR's shares fell over 14 percent on Monday, its biggest one-day loss in more than four years, after it issued a disappointing revenue forecast, stoking concerns of slowing demand and rising costs. In a regulatory filing after the market close on Friday, AMR said it expects passenger revenue from its mainline and regional operations to rise 3.7 percent to 4.7 percent in the third quarter. The pace of growth is slower than its rivals, according to recent data. Continental Airlines earlier this month said passenger revenue per available seat mile, or unit revenue, rose 6.5 percent to 7.5 percent in August. Sep 25, 2007

American Eagle, the regional affiliate of American Airlines, will celebrate its new nonstop jet service between Milwaukee and Sawyer International Airport in Marquette, Mich., with an introductory round-trip fare of $98. Sep 27, 2007

Oneworld partners British Airways and American Airlines will not file for antitrust immunity under the new U.S.-European Union open skies deal, British Airways CEO Willie Walsh said. "We're not doing anything to pursue antitrust with American," Walsh said. "We don't see that the agreement has changed [the situation] to a degree that would give us confidence that applying for antitrust immunity would be successful." Sep 27, 2007

Iceland's FL Group a Reykjavik-based firm, which owns Scandinavian discount airline Sterling Airlines and formerly owned Iceland's flagship carrier, said its conservative analysis found more than USD$4 billion upside from unbundling the AAdvantage frequent-flyer program, though it does not believe American Airlines parent AMR should sell right away. AMR's market capitalization is USD$5.3 billion. Smarason said most investors and analysts cannot easily understand the profitability of AMR's individual business units because of its structure as a fully integrated legacy airline, which he blamed for weighing on the shares. The problem is compounded because AMR does not disclose detailed financial information, he added. Sep 27, 2007

Iceland's FL Group has written to the board of American Airlines parent AMR and urged it to consider a number of strategic alternatives, including spinning off its frequent-flyer program. FL Group, a private equity firm which owns 8.25 percent of AMR, said in the letter that changes at AMR are long overdue given the 50 percent drop in the share price since January. The letter was sent on Tuesday and disclosed on Sept 27. FL Group cited the success Air Canada parent ACE has had by spinning off its loyalty program. Sep 27, 2007

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