Parent of American, TWA posts record losses

By Beth Lewandowski
CNN

WASHINGTON (CNN) -- Stung by the September 11 terrorist attacks, AMR Corp., the parent company of American Airlines and TWA, posted a quarterly loss of $525 million Wednesday, the worst in the company's history.

"With the economy weak and fuel prices still relatively high, we and the rest of the industry were experiencing a very difficult financial quarter even before the September 11 attacks," said Don Carty, AMR chairman and chief executive officer.

"But the attacks and their aftermath further weakened traffic and had a staggering effect on our overall financial performance."

Dallas-based AMR's losses came despite government financial-aid payments totaling $508 million to the airlines. This time last year, the company posted a $322 million net profit.

Carty said American Airlines had cut its schedule by about 20 percent to reflect reduced demand and had eliminated approximately 20,000 jobs in a cost-cutting effort. He also announced that he and the entire Board of Directors will take no compensation for the remainder of the year, and every senior officer has taken voluntary pay cuts.

But Carty remained upbeat.

"Our brand is strong, our global route network is intact, we have an excellent fleet," he said. "All this gives us a solid base for winning back our customers, which in the end will be the key to resolving our financial challenges."