American Airlines continues to lag

US Airways joined Delta and United in posting a big second-quarter profit. American Airlines missed the party.

Alone so far among the nation's biggest airlines, American reported Wednesday that it lost money this spring, although far less than it did a year ago. American blames its troubles on high fuel and labor costs and a competitive handicap on international flights.

Overall the second quarter is shaping up as the airline industry's best in three years.

Executives say business travel is coming back after the recession. Another big part of the airlines' newfound success is their willingness to reduce flights, leading to fewer seats and higher fares. So far, they have resisted the urge to expand quickly at the first hint of improving demand.

The average fare on American, for example, rose 14 percent compared with a year ago.

American parent AMR Corp. lost $10.7 million in the second quarter, a huge improvement over the loss of $390 million in the same period last year. Still, the loss stuck out compared with the combined $1 billion in profits reported by US Airways, Delta Air Lines Inc. and United parent UAL Corp.

Discount airline AirTran reported a smaller profit, and Continental reported earnings of $233 million last quarter.

American, the nation's second-biggest airline behind Delta, blamed its loss on a 24 percent spike in fuel costs. But all airlines are facing higher fuel costs.

Michael Derchin, an analyst with CRT Capital Group, said American suffers from higher labor costs because unlike Delta, United and US Airways, it didn't cut wages and pensions through the bankruptcy process.

AMR spends 30 percent of its revenue on wages and other labor costs. Delta's labor costs were 21 percent of revenue in the second quarter, United's 20 percent and US Airways' 18 percent.

US Airways, the nation's sixth-largest airline, said a bump in business travelers who paid higher fares helped it earn $279 million, or $1.41 per share -- $1.34 per share without special gains. That beat the $1.18 per share forecast by analysts. Revenue rose more than 19 percent to $3.17 billion.

AirTran Holdings Inc., the owner of AirTran Airways, said Wednesday it earned $12.4 million, down 84 percent from a year ago, as higher costs and bad bets on the price of fuel offset a 16 percent increase in revenue.