American Airlines' parent company reveals massive loss

American Airlines' parent company has posted massive losses.

AMR Corp says it suffered an "incredibly difficult" final three months of the year following the US terror attacks.

AMR posted a quarterly net loss of $734m before one off costs compared with earnings of $56m a year earlier.

Don Carty, AMR chairman and chief executive, says: "Traffic, particularly business travel, was down significantly in the quarter, which - when combined with lower average fares - resulted in a record quarterly loss."

Mr Carty believes AMR has a long way to go to return to profitability, but says there are a number of encouraging signs.

He adds: "Traffic is improving, and we're in much better shape than we might have been otherwise, thanks to a strong product, great people and strategies like fleet flexibility and simplification."

The group says it's disappointed with the results but has taken steps to bolster its financial position.

The fourth quarter results brought the company's full year net loss to $1.4b before one off costs.

This compares with net earnings of $752m a year earlier.

The company has reached an agreement with Boeing that will result in the earlier than planned retirement of its short-haul, 100-seat 717 fleet by June this year.