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Airline faces familiar nemeses: Fuel costs

Gerard Arpey, chair and CEO of American Airlines, attends the preview opening of the airline's newly built terminal at JFL Airport in New York on July 27, 2005. The facility, which cost $1.1 billion and has 36 gates, was expected to service 8.5 customers annually. (UPI File Photo/Monika Graff)
Gerard Arpey, chair and CEO of American Airlines, attends the preview opening of the airline's newly built terminal at JFL Airport in New York on July 27, 2005. The facility, which cost $1.1 billion and has 36 gates, was expected to service 8.5 customers annually. (UPI File Photo/Monika Graff) | License Photo

FORT WORTH, Texas, July 21 (UPI) -- American Airlines Chairman and Chief Executive officer Gerard Arpey blamed rising oil prices for the U.S. carrier's second quarter losses.

The airline reported losses of $11 million in the second quarter, "essentially (a) break-even result," Arpey said in an open letter sent to United Press International.

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The result is comparatively flat compared to the $390 million loss in the same period of 2009, he said.

But Arpey also said, "much of our second quarter revenue momentum was negated by high fuel costs."

Revenue for the airline in the second quarter hit $5.7 billion with a "near record" load capacity of 83.9 percent, Arpey said. Included in the revenue was "a big increase in passenger revenue."

Fuel costs in the quarter, however, were $330 million more than the airline would have paid at 2009 prices, Arpey said.

In spite of losses, Arpey announced American Airlines would purchase 35 Boeing 737-800s for delivery in 2011 and 2012. "These new aircraft will be in addition to the 84 737s that began entering our fleet last year," he said.

Arpey heralded the airline's antitrust immunity regarding participation in the oneworld airline alliance, granted by both the U.S. Department of Transportation and the European Commission. Services with British Airways, Iberia, Royal Jordan and Finnair "will be highly integrated," he said.

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