AMR, US Airways Forecast Big Profits

The airline industry has fared poorly in recent years; a factor contributing to the mergers of several large companies including American Airlines and US Airways Group. AMR Corp., the parent company of American Airlines announced today that they expect the merger to earn a profit of $2.6 billion this year. Total revenue is forecasted to reach $40.91 billion and is expected to hit $47.83 billion in 2017. One of the biggest factors in long range planning and projections for the company’s performance is oil prices; which are highly volatile. Fuel prices will be the company’s biggest cost with estimations reaching 13.4 billion this year and 13.1 billion in 2017.

AMR went bankrupt in late November 2011 and agreed to merge with U.S. airways two months ago. Their merger made them the largest airline in the world although $1.2 billion will be spent in transition cost over the next 3 years.

Evan Chang

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324030704578426840496206824.html?mod=WSJ_business_whatsNews

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