American Airlines To Report 3rd Quarter Earnings

Oct 19, 2011
Originally published on October 19, 2011 12:21 pm

Transcript

RENEE MONTAGNE, HOST:

All of the major U.S. airlines are expected to report a profit for the third quarter, except for American Airlines. Its earnings come out later today. If United Airlines and Delta can make money in this economy, what's the problem with American? NPR's Wade Goodwyn explains.

WADE GOODWYN, BYLINE: To go into bankruptcy or not to go into bankruptcy, that is the question. It was the question for American Airlines executives eight years ago too, but big concessions from its labor unions saved the company from having to file. It was a sign of the airline's strength, or at least its stubbornness. And so American has struggled along, in many ways a picture of success on the outside but when it came time to report, it's almost always red numbers, sometimes big red numbers.

Meanwhile, Delta, United and Continental, who've all been through bankruptcy, sometimes twice, are considered leaner and more nimble. So was American's noble quest to bravely soldier on and not declare a mistake? Should it now reverse course, rip open some prepackaged bankruptcy and cast off its legacy pension and healthcare obligations? American's executives say the answer is still no. But like Ford Motor Company, American Airlines executives had the vision to borrow money before the crisis hit. It's expected to end the year with three-and-a-half billion in cash. If Europe can keep its financial system from imploding and the recession begins to ease, American Airlines should be able to cut capacity and limp through. But like the national economy, any robust recovery is a long term proposition. Wade Goodwyn, NPR News, Dallas. Transcript provided by NPR, Copyright NPR.