AMR Posts $69 Million Loss in Q4, $504 Million Profit for Full Year

American parent company AMR reported a $69 million loss for the fourth quarter, citing higher fuel prices as a major factor in breaking its streak of six straight quarterly profits, but the airline still managed a $504 million profit for the full year.

In 2006 AMR posted a $17 million profit for the fourth quarter and $231 million for the full year.

In the fourth quarter of 2007, American’s cost per available seat mile for mainline flights rose 8.6 percent year-over-year. That’s primarily because American paid $367 million more for fuel in the quarter than it would have paid at fourth quarter 2006 fuel prices.

Fuel costs are going to continue to be a challenge for American, and all the other airlines, going forward, and is believed to have pushed many airlines into losses for the fourth quarter, which is a relatively weak quarter for them to begin with because the summer travel peak has ended.

On the positive side for American, however, is that it has achieved its first back-to-back profitable years since 1999-2000. Its fourth quarter revenue rose 5.3 percent year-over-year to $5.7 billion, and full-year revenue rose 1.6 percent to $22.9 billion.

American also filled a record 80.2 percent of its seats in the fourth quarter, up from 78.8 percent in the fourth quarter of 2006. Its yield –a measurement of fares- increased 2.6 percent, marking its 11th consecutive quarter of year-over-year yield increases.

AMR ended the quarter and year with $5 billion in cash and short-term investments, compared to $5.2 billion at the end of 2006. Over the same time period, it reduced its total debt from $18.4 billion to $15.6 billion.

The airline expects its full-year mainline capacity to increase by just 1 percent this year, with a reduction of less than 1 percent in domestic capacity and a 3.3 percent increase in international capacity. American noted that even that 1 percent increase is overstated, because weather cancellations forced it to “under-fly” its 2007 schedule.

American and other airlines have been scaling down on capacity increases to enable them to fill a greater percentage of seats and raise fares, and have been shifting capacity to more lucrative international routes.