American Airlines yesterday reported a first quarter loss of more than $1-billion , underlining the urgency with which it needs to resolve its dispute with unions.
Boeing, the aircraft maker, also issued a warning on full-year profits as the effects of a weak economy, the Iraq war and the Sars illness continue to devastate the industry.
The American Airlines figures were announced as reports from Dallas, where the airline is based, suggested that chief executive Don Carty is barely hanging on to his job.
The airline has faced a rebellion among workers after it emerged that executives planned to pay themselves retention bonuses and to protect their pensions against bankruptcy.
The Allied Pilots Association yesterday joined the ground workers and flight attendants in threatening to abandon pay cuts and concessions totalling $1,8-billion a year agreed last week, before the executives’ packages were made public.
American management has ditched the retention bonus plan that would have paid the top six executives twice their basic salary for staying until 2005, but the pension plan stays in place.
”Our first quarter results were dreadful,” Carty said. ”All told it’s a perilous climate and our success is far from assured.”
At Boeing, a first quarter loss of $478-million was recorded. The figure included good will write-offs for the falling value of acquisitions and of aircraft owned by its leasing unit. Revenue fell by 11% to $12,3-billion. The company lowered its full year earnings estimate by 11%.
Boeing chief executive Phil Condit said he expected a quick rebound in air travel after the war but was less sure of how long Sars would affect demand. The company delivered 71 commercial jets in the quarter, down 35% on the first quarter of 2002. – Guardian Unlimited Â