AMR Profitable in Bankruptcy (AAMRQ, JBLU, LCC, DAL)

It is almost hard to believe, but AMR Corporation (NASDAQOTH: AAMRQ.PK) has proven to be profitable in the month of July. AMR has made an SEC Filing which discloses its Monthly Operating Report for the month ended July 31, 2012. The report shows that this was filed with the United States Bankruptcy Court for the Southern District of New York.

Something strange has managed to occur here in this bankruptcy… AMR showed operating income for the month of July of $240 million and it somehow managed to turn in positive net income of $135 million. Total revenue was $2.33 billion with only $259 million being cargo and ';other' revenue, while total expenses were $2.09 billion in the month.

The filing shows a total current assets of $7.83 billion and total current liabilities of $9.787 billion. We would note that the current liabilities does include current maturities of long-term debt being just over $1.6 billion.

Owning an airline is no easy task, and the biggest question that remains is who will buy AMR out of bankruptcy. There had been speculation that JetBlue Airways Corporation (NASDAQ: JBLU) was interested in a deal, but that airline has publicly said that it has no real interest in merging with AMR. The most feasible airlines just due to the size of the carriers is a merger of some sort with one of either US Airways Group, Inc. (NYSE: LCC) or Delta Air Lines Inc. (NYSE: DAL).

Someone still sees some potential value for AMR's common shareholders here despite the notion that most common shareholders suffer a total loss in a Chapter 11 bankruptcy reorganization. Shares are at $0.475 against a 52-week range of $0.20 to $3.73.Stay tuned.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Airlines, Bankruptcy, Earnings Tagged: AAMRQ, DAL, JBLU, LCC