The bottom-line number for the airline in November was a loss of $347 million. Yikes.
But wait, $301 million of that represented bankruptcy-related items, so we shouldn’t pay attention to those.
Except… then they still lost $46 million. For the month.
And yet they “reported an operating profit of $1 million.” See, they’re making money. Even though they lost nearly $350 million.
“Operating” results can be useful numbers, the idea that there are certain one-time items that obscure the performance and viability of an underlying business. If you’re looking at financial results to gain an understanding of how a venture ‘normally’ operates you may want to exclude certain things from the analysis.
But those same operating results can hinder understanding as well, and I admit that when I see a “$1 million profit” after excluding this and that I am skeptical, inferring that the folks putting together the numbers really really wanted to say that they made money and had to make the amount really really small because it was such a stretch.
American has made real strides in its bankruptcy. They’ve lowered costs, which they needed to do. They’ve invested in their product and have plans to do more along those lines. But they do still have a revenue problem.
Not as big a revenue problem as November’s numbers indicate, since they believe that they lost about $55 million due to hurricane Sandy and the pilot job action that caused passengers to book away and otherwise limit revenue.
It’s only one month’s results but it looks like American has made progress but still has quite a bit of progress to make. Many will think it means they have to merge, I believe that the merger is a distraction from the work that they have to do.