This is APA Communications Deputy Chairman First Officer Scott Shankland with the APA Information Hotline for Wednesday, October 21.

While the third-quarter performance is disappointing, there were some positive indicators within the data. Since July 1, AMR has increased liquidity by approximately $5 billion, and the third-quarter total cash balance was reported at $4.6 billion, including approximately $460 million in restricted cash. Third-quarter passenger load factor of 83.9% was a record high for AA. Additionally, excluding special items, the year-over-year third-quarter loss was $109 million less this year. Also, due to the significant drop in fuel prices, third-quarter year-over-year fuel expense was down $1.1 billion.

AMR’s overall performance could still indicate that a more serious underlying problem—such as pervasive labor unrest—is slowing any recovery. AMR management appears to underestimate the impact of the company’s widespread labor problems, yet the most effective way to turn this airline around, both financially and operationally, is for management to begin treating their employees as partners in the business. Management has spent a great deal of time and effort making the appropriate financial adjustments to enable the airline to ride out the recession. We just wish they would make an equally committed effort to improve their relationship with employees. Management has wasted several recent opportunities to reach agreements with pilots and begin moving towards a better relationship.

APA FALL BOARD OF DIRECTORS MEETING: As a reminder, the annual APA fall Board of Directors meeting will resume next week at APA headquarters. The meeting is scheduled to begin at 9:00 a.m. Monday, October 26 and continue through Tuesday. All members in good standing are welcome to attend any open portion.

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