Despite weather-related delays and cancellations and higher-than-expected fuel prices, American Airlines parent AMR Corp. posted net income of US$317 million in the second quarter, up 8.9% over a US$291 million profit in the year-ago period and its fifth consecutive quarter in the black following years of steep losses.

Chairman and CEO Gerard Arpey said the carrier has "come a long way" to return to profitability and is "pleased" with the result. "But I think it's important to realize that relative [to other industries], our company and the airline industry are still performing poorly," he said. "We're trying, and have been trying for years, to drive our company out of a destructive capital cycle ... so that we can sensibly grow the business."

Arpey said AA will continue to grow capacity at a "very conservative" pace and keep a tight grip on costs by achieving a projected US$300 million in incremental annual savings for 2007, adding, "We must remain mindful that painfully high fuel prices and continuing intense competition present formidable challenges for the remainder of the year and beyond."

Second-quarter revenue declined 1.6% to US$5.88 billion while expenses also dropped 1.6% to US$5.41 billion, producing operating income of US$467 million, down 1.9% from US$476 million in the year-ago quarter. Mainline traffic decreased 3.2% to 35.67 billion RPMs on a 4.4% dip in capacity to 42.65 billion ASMs. Load factor was 83.6%, up 1 point and an all-time record for the carrier.

Yield rose 2.3% to 13.10 US cents as passenger RASM increased 3.6% to 10.96 US cents and CASM lifted 2.4% to 11.14 US cents. CASM excluding fuel grew 1.3% to 7.68 US cents. Fuel price per gal. dipped 1% to US$2.08. Full-year capacity is expected to decrease 2.1%, with a 2.6% reduction in international ASMs and a 1.3% drop in domestic flying.

CFO Tom Horton noted that the delivery of 47 737-800s on order will be pulled forward to 2009-12 from the previously planned 2010-13 delivery period.