American Airlines 2001 Annual Report Download - page 4

was approximately $3.6 billion, and we expect it to be just
$1.8 billion in 2002.
Our capital controls have been complemented by our
myriad expense-reduction efforts, which include: trimming
in-flight amenities, closing most of our city ticket offices and
some lesser-used airport lounges and cutting back on advertis-
ing and promotions, information technology and corporate
overhead. We have also been able to negotiate some meaning-
ful cost reductions with many of our suppliers.
None of these initiatives were particularly pleasant,
but worst of all, in the face of staggering losses we took the
painful step of reducing our workforce by the equivalent of
20,000 jobs. Fortunately, through creative and collaborative
work on the part of our management team and union leaders,
we were able to mitigate at least some of the effect on our
people through initiatives like voluntary leaves, job sharing,
military leaves and reductions in overtime.
Controlling both capital spending and operating costs was,
and is, a critically important part of our efforts to rebuild our
Company. Moreover, our determination to prudently manage
our balance sheet in recent years paid off in a big way as we
sought a cash cushion to help weather the storm of late 2001.
For some time, AMR had a sizeable undrawn bank line,
which we drew down shortly after September 11. In the days
following, we were also able to complete a deal that provided
$1.9 billion in secured financing. And, during 2001, we
received $730 million from the government as part of the
Airline Stabilization Act passed in September. We expect to
receive another $130 million in 2002.
All that leaves us with a balance sheet which, relative to
the rest of the industry, remains strong. We ended 2001 with
about $3 billion in cash and a large stockpile of unencum-
bered aircraft assets we can draw upon, if necessary. Nonethe-
less, the losses we incurred for the year were staggering. The
net loss of about $1.8 billion in 2001, which includes a loss
of $800 million for the fourth quarter alone, dwarfed any
previous year’s loss.
2001 was a painful year for all three of our major con-
stituency groups. We lost many valued customers, friends and
colleagues on both September 11 and November 12. For
many others, the joy of flight has been dampened, at least
temporarily. Thousands of AMR employees lost their jobs,
and all of us were deeply troubled by the attacks on our coun-
try. Customers and employees alike have had to make some
dramatic adjustments to deal with the new security require-
ments of the post-9/11 world. And of course, our shareholders
have taken a tremendous hit, as AMR shares fell significantly
in the aftermath of the September attacks.
And yet, despite all the bad news, 2001 – which, among
other things, marked our Company’s 75th anniversary – did
contain a number of important highlights and milestones.
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