AMR said American has reached an agreement with Boeing for the deferral of a total of 34 airplanes during 2003, 2004 and 2005. Under the agreement, American will take delivery of only 11 airplanes in 2003 -- nine 767-300s and two 777s -- compared with the original plan of 19. No airplanes will now be delivered to American in 2004 and 2005. The airline had planned on taking 13 aircraft each year in 2004 and 2005.
With these and other adjustments to AMR''s capital spending plans, the company has further reduced its capital spending plan by more than $1.5 billion from 2003-2005, AMR said.
American also announced that it would supplement its near-term cost-saving efforts by temporarily storing about 42 aircraft starting in early 2003. By putting 28 MD-80s and 14 767-200s into short-term storage, American will save in excess of $100 million in expenses over the next two years, largely because of reduced maintenance expenditures. Based on current projections, American expects that these aircraft would remain in storage until at least 2005.
We are managing this business for the short- and long-term and are sharply focused on its success, Mr. Carty said. The scope, variety and magnitude of our various actions and initiatives are an insight into the seriousness with which we approach our task and the determination with which we are seeking solutions.
AMR said it will continue to focus on efforts to reduce costs and capital spending, increase efficiency and return to profitability.
In early-afternoon trading on the New York Stock Exchange, AMR fell 55 cents, or 12%, to $3.93. Volume was 1.5 million shares, compared with average daily volume of 2.9 million shares.
In August, American Airlines unveiled a series of cost-saving initiatives aimed at the huge losses that have been incurred since the beginning of the year. Among the initiatives were the de-peaking of the Dallas/Fort Worth hub and many spoke cities, the retirement of the 74-plane Fokker 100 fleet by 2005, a reduction of an estimated 7,000 jobs by March 2003, and steps to enhance the efficiency of several fleet types, including 777s and 767-300s.
When taken in combination with previously announced initiatives such as its headquarters consolidation and EveryFare program, AMR on Wednesday said these efforts should contribute more than $2 billion in steady state, structural cost savings over the coming years, independent of capacity-related changes.
In addition, the company said efficiencies in the use of airplanes from de- peaking and fleet actions will allow American to forgo the equivalent of 17 new aircraft in the future, saving more than $1.3 billion in capital spending.
-Rose K. Manzo; Dow Jones Newswires; 609-520-4345
(Stephen Lee of Dow Jones Newswires contributed to this article.)
With these and other adjustments to AMR''s capital spending plans, the company has further reduced its capital spending plan by more than $1.5 billion from 2003-2005, AMR said.
American also announced that it would supplement its near-term cost-saving efforts by temporarily storing about 42 aircraft starting in early 2003. By putting 28 MD-80s and 14 767-200s into short-term storage, American will save in excess of $100 million in expenses over the next two years, largely because of reduced maintenance expenditures. Based on current projections, American expects that these aircraft would remain in storage until at least 2005.
We are managing this business for the short- and long-term and are sharply focused on its success, Mr. Carty said. The scope, variety and magnitude of our various actions and initiatives are an insight into the seriousness with which we approach our task and the determination with which we are seeking solutions.
AMR said it will continue to focus on efforts to reduce costs and capital spending, increase efficiency and return to profitability.
In early-afternoon trading on the New York Stock Exchange, AMR fell 55 cents, or 12%, to $3.93. Volume was 1.5 million shares, compared with average daily volume of 2.9 million shares.
In August, American Airlines unveiled a series of cost-saving initiatives aimed at the huge losses that have been incurred since the beginning of the year. Among the initiatives were the de-peaking of the Dallas/Fort Worth hub and many spoke cities, the retirement of the 74-plane Fokker 100 fleet by 2005, a reduction of an estimated 7,000 jobs by March 2003, and steps to enhance the efficiency of several fleet types, including 777s and 767-300s.
When taken in combination with previously announced initiatives such as its headquarters consolidation and EveryFare program, AMR on Wednesday said these efforts should contribute more than $2 billion in steady state, structural cost savings over the coming years, independent of capacity-related changes.
In addition, the company said efficiencies in the use of airplanes from de- peaking and fleet actions will allow American to forgo the equivalent of 17 new aircraft in the future, saving more than $1.3 billion in capital spending.
-Rose K. Manzo; Dow Jones Newswires; 609-520-4345
(Stephen Lee of Dow Jones Newswires contributed to this article.)
