Oct. 22--There were fewer customers flying in the third quarter, especially high-dollar business travelers, and that led Fort Worth-based AMR Corp., parent of American Airlines, to report a quarterly loss of $359 million, or $1.26 per share.

Revenue dropped more than 20 percent to $5.1 billion, compared with $6.4 billion in the same period last year. The third-quarter loss compares with a profit of $31 million that AMR posted in the third quarter of 2008, when it sold its American Beacon Advisors financial services unit for $432 million.

The earnings news, and a dour outlook for the fourth quarter, sent shares of AMR (ticker: AMR) down almost 12 percent, a decline of 91 cents, to close at $6.75 on Wednesday.

"The struggling economy continues to dampen the demand for air travel, making it difficult to fill our aircraft with customers willing to pay fares sufficient for us to make money," AMR CEO Gerard Arpey wrote in a letter to employees. "As we head into the traditionally slower winter months, it is likely that we are going to continue to face stiff economic headwinds."

American cut capacity throughout its flight schedule, producing relatively full planes. Its planes were an average of 84 percent full, which in past years would have easily produced profits.

But it also had to cut fares to attract passengers, and traffic still dropped 6 percent as business travel continued to be weak.

American said it expects full-year capacity to drop 7.5 percent in 2009 compared with 2008.

The company said its latest results include $94 million in charges related to the sale of aircraft and the grounding of an Airbus A300 before the expiration of its lease. Excluding those charges, the company said its quarterly loss was 93 cents per share, beating analysts' expectations of a loss of 95 cents per share.

Even falling fuel prices weren't enough to boost the carrier's earnings. American said it spent a remarkable $1.1 billion less in the third quarter than it did a year ago, a decline of nearly half. There are concerns, however, that oil and jet fuel prices are creeping back up.

"Investors were hoping to hear that business is getting better and business travel is coming back," Jim Corridore, a Standard & Poor's equity analyst in New York, told Bloomberg News. "You have to give people a clear picture of what you're seeing and, obviously, they're not seeing significant signs of improvement."

The one bright spot in the quarter for the airline was that it raised about $5 billion in additional liquidity through various financing deals, including the $1 billion advance sale of AAdvantage miles to its credit card partner, Citibank. The company also raised $860 million in cash from a public sale of stock and debt.

American also generated $585 million in ancillary revenue in the third quarter from bag fees, flight change fees and food services.

However, unit revenue, also known as passenger revenue per seat mile, still dropped 14.5 percent.

Two other major airlines also reported earnings Wednesday:

Continental posted an $18 million loss, or 14 cents per share, as business travelers continued to stay at home. Revenue dropped 20.2 percent to $3.32 billion. However, excluding one-time accounting charges, the Houston-based airline reported a profit of 2 cents per share, beating analysts' expectations of a loss of 6 cents.

Low-cost carrier AirTran reported a profit of $10.4 million, or 8 cents per share, even though revenue dropped 11 percent to $597.4 million. Third-quarter earnings were in line with what analysts expected from the Orlando, Fla.-based airline.

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