Financial Statement Analysis
American Airlines (AMR)
American Airlines (AAs), American Eagle, and American Connection currently provide scheduled service to 250 cities in 40 countries, with an average of over 3,400 daily flights. Together, these carriers operate a fleet of over 700 aircraft and are subsidiaries of the AMR Corporation. Though AMR was founded in 1982, the AAs brand has been a major player in air travel for over three quarters of a century (www.AA.com.). The AMR mission statement is:
"Setting the industry standard for safety and security; providing world-class customer service; creating an open and participative work environment which seeks positive changes, rewards innovation and provides growth, security and opportunity to all employees; and providing consistently superior financial returns for shareholders." (www.AA.com).
An article written by Gaby Logan from USA Today stated: “Despite this government-funded measure, several prominent AAs declared bankruptcy not long after the 9/11 attacks, included US Airways and United Airlines.” As a result of the massive financial losses due to lack of passenger demand, canceled flights and increased expenditures for security, even airlines that did not have prior financial issues were forced to renegotiate labor contracts and lay off high numbers of employees, such as the 7,000 employees laid off by AA.”(Gaby Logan, USA Today article published Nov 2009). US Airways, Delta Airlines and Southwest Airlines, just to a name few, did recover from that financial hardship. However, AMR has cut cost significantly the past 11 years and still has recorded heavy losses in every year with the expectations of 2006 and 2007 (Cullen, Yamaza and Chew, 2010).While AMR is betting heavily on resurgence of supply and demand of commercial air travel as the economy recovers, analysts expect…...