American Airlines 1998 Annual Report Download - page 36

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migration services for US Airways. The Company, however,
expects strong revenue growth from outsourcing contracts
signed in 1998, new contracts expected in 1999, and from
software development and real-time processing services.
Additionally, the Company expects overall revenue growth
from the electronic travel distribution business to be consis-
tent with prior years. While the Company anticipates a
decline in domestic airline bookings growth in 1999, the
Company expects to compensate for the decline with
growth in international bookings, market share gains world-
wide, price increases and revenues from new promotional
and marketing products. The Company expects an
improved operating margin for The Sabre Group in 1999
due to a reduction in its Year 2000 Readiness program activ-
ity as the Year 2000 Project is nearing completion. In
addition, the Company expects improved margins on the
US Airways contract as the migration services will be com-
pleted in early 1999 and the contract will be moving to
steady state. The Company expects selling, general and
administrative expenses for The Sabre Group will increase
in 1999 as a result of sales growth initiatives and increased
administrative requirements to support The Sabre
Group’s growth.
FORWARD-LOOKING INFORMATION
The preceding Letter from the Chairman, essays on the
Airline Group and The Sabre Group and Management’s
Discussion and Analysis contain various forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which repre-
sent the Company’s expectations or beliefs concerning
future events. When used in this document and in docu-
ments incorporated herein by reference, the words
“expects,” “plans,” “anticipates,” and similar expressions are
intended to identify forward-looking statements. Forward-
looking statements include, without limitation, expectations
as to results of operations and financial condition, including
changes in capacity, revenues and unit costs, expectations as
to future financing needs, Year 2000 and euro readiness,
overall economic projections and the Company’s plans and
objectives for future operations, including plans to develop
future code-sharing programs and to evaluate new alliances.
All forward-looking statements in this report are based upon
information available to the Company on the date of this
report. The Company undertakes no obligation to publicly
update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise.
Forward-looking statements are subject to a number of fac-
tors that could cause actual results to differ materially from
our expectations. The following factors, in addition to other
possible factors not listed, could cause the Company’s actual
results to differ materially from those expressed in forward-
looking statements: uncertainty of future collective
bargaining agreements and events; economic and other con-
ditions; commodity prices; competition in the airline
industry; competition for The Sabre Group; changing busi-
ness strategy; government regulation; uncertainty in
international operations; and Year 2000 Readiness. Additional
information concerning these and other factors is contained
in the Company’s Securities and Exchange Commission
filings, including but not limited to the Form 10-K for
1998, copies of which are available from the Company
without charge.
MARKET RISK SENSITIVE INSTRUMENTS
AND POSITIONS
The risk inherent in the Company’s market risk sensitive
instruments and positions is the potential loss arising from
adverse changes in the price of fuel, foreign currency
exchange rates and interest rates as discussed below. The
sensitivity analyses presented do not consider the effects
that such adverse changes may have on overall economic
activity, nor do they consider additional actions manage-
ment may take to mitigate its exposure to such changes.
Actual results may differ. See Note 6 to the consolidated
financial statements for accounting policies and additional
information.