American Loses $328 Million, Reveals Plans to Cut Costs

A 45 percent increase in aircraft fuel costs helped push AMR Corp., the parent of American Airlines, to a $328 million loss in the first quarter of 2008. American’s fuel bill was $2.05 billion in the quarter, compared with $1.41 billion a year earlier.

The airline is taking “numerous steps” to address the challenges of a weakened economy and record-high fuel prices, such as its recent hiring freeze for management and support staff. The airline also is making additional reductions to its 2008 capacity plan and is accelerating the replacement of its MD-80 fleet with more efficient Boeing 737-800s.

Also, AMR Corp. has agreed to sell American Beacon Advisors, its wholly owned asset-management subsidiary, to Lighthouse Holdings, for about $480 million. Lighthouse Holdings is owned by investment funds affiliated with Pharos Capital Group and TPG Capital. AMR will retain a 10 percent equity stake in the business.