AMR loses in Q2, however you measure it

Last year, AMR sustained a Q2 loss of $1.46 billion ($5.83 per share), mostly because it wrote down the value of its fleet. Without that charge, the loss would have been only $298 million.

So, there are two ways to look at this. Include the charges, and the Q2 loss got a lot better year-over-year, but it's still higher than expected. Or, exclude the charges, and show a widening loss year-over-year.

Well, we're dealing with an airline company, so there really isn't much of a bright side to hunt for.

AMR is the first airline to report its results for the second quarter. Factors cited by the airline – which you'll probably see again and again as others release their results – include a substantial decline in travel as a result of the global recession and the rising price of jet fuel. The former's a no-brainer, but let's be realistic about fuel prices. At this time last year, we were tearing at our shirts, screaming about the fact that oil would never come back to "normal." There hasn't been much rending of garments lately.

In fact, AMR's fuel spending fell 45%, saving the company almost $1.1 billion. Meanwhile, revenue still fell close to $1.3 billion. The real problem is the 8.2% drop in traffic on American Airlines, which came faster than it could cancel flights that weren't profitable.

The average fare on American Airlines was off 15.4% last quarter. The company tried to recoup that money in other ways, but had only limited success. Additional fees, from checked luggage to on-board food purchases, put another $565 million in the company's coffers last quarter (an increase of 7.4%), but it was only a partial solution. Look for the airline to cut 1,600 jobs starting in late August, when it comes down from the heights of the summer travel season.