The parent company of American Airlines Inc. yesterday reported a $215 million fourth-quarter loss, wiping out the previous nine months' earnings to put the carrier in the red for 1990.
The loss is expected to be the first in a series of dismal airline industry earnings reports that could add up to an overall loss of $2 billion.
AMR Corp. blamed the fourth-quarter loss on high fuel prices, a slow economy and pilots who the company says have engineered a sick-out that has forced it to scale back service. The results "were worse than expected," said First Boston Corp. airline analyst Paul Karos, who had expected the firm to break even for the year.
AMR posted a loss for 1990 of $39.6 million on revenue of $11.72 billion. In 1989, it earned $454.8 million on revenue of $10.48 billion.
Of the larger carriers, only United Airlines Inc., Southwest Airlines Co. and Alaska Airlines Inc. are expected to post a profit for the year.
United Chairman Stephen M. Wolf this week said the carrier will post its largest quarterly operating loss ever for the last reporting period of 1990.
The industry-wide losses expected for 1990 would dwarf previous records. Fourth-quarter losses are expected to add up to $1.7 billion, said David A. Swierenga, vice president for statistics for the industry's Air Transport Association in Washington.
The previous record loss of $916 million occurred in 1982.
The large losses in the industry already have precipitated two airline bankruptcy filings in the past year -- Continental Airlines Holding Corp. in December and Pan American World Airways Inc. earlier this month -- and threaten to speed up consolidation in the industry.
Eastern Air Lines Inc., which entered bankruptcy proceedings before the industry's current troubles began, is close to running out of cash, one source familiar with its situation said. Unless it can find an investor, Eastern could be forced to shut down as early as midnight Friday, the source said. Eastern said the airline declined to comment on "rumors."
The dismal performances likely will continue into the first quarter of 1991 but may begin abating later if fuel prices stabilize, analysts said. The war in the Middle East could drive up fuel costs, scare off more travelers and change all that.