US carriers face US$1bn quarterly loss
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The mounting losses of AMR Corp. and UAL Corp., the respective parent companies of American Airlines and United Airlines - America’s two largest airlines – may lead the industry to record a third-quarter deficit of up to US$1 billion, Bloomberg has reported.
If realised the losses - an estimated combined figure for the top 10 US carriers - would be double those seen in Q2.
“Fuel really hit them hard, and they responded quickly by raising fares and taking capacity out,” said Jim Corridore, an analyst at Standard & Poor’s Equity Services in New York. “They have made a lot of hard decisions.”
Texas-based AMR is likely to report losses of US$360 million – its fourth straight quarterly deficit, according to analysts’ estimates compiled by Bloomberg. Meanwhile Chicago-based UAL is likely to lose US$310 million, partly because of write-down’s on the value of its fuel-hedging contracts.
However there is brighter news Delta Air Lines which Bloomberg reported will be “roughly break even” for Q3 because of higher fares and capacity cutbacks.
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