Additional Cuts For American

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Aug 20, 2002
NEW YORK, Sept 25 (Reuters) - The head of American Airlines, Donald Carty, said on Wednesday that the world''s largest carrier will cut its capacity by about 2 percent beyond announced plans over the next few months as it aims for about $3 billion in structural costs savings.
[P][!--loc=LREC noad=#E--]Carty, chairman of American''s parent company, AMR Corp. (NYSE:[A href=]AMR[/A] - [A href=]News[/A]) told a meeting of airline analysts that his company will also form a new agreement with travel agents that will allow them to tap into Internet fares the carrier offers. The program should cut American''s distribution costs.
[P]American slashed capacity by about 20 percent after the Sept. 11, 2001, attacks on the United States and announced an additional 9 percent capacity cuts about two months ago.
[P]I think that number is going to be a lot closer to 10 or 11 percent by the time we are finished adjusting the schedule, Carty said.
[P]Carty said that since last fall, American has announced changes the company believes will lead to $1.1 billion in savings as the company aims to have permanent structural cost reductions of $3 billion.
[P]There is no sugar-coating the fact that we have a lot more to do, Carty said.
[P]Carty announced a new plan called EveryFare where traditional travel agencies can tap into American''s web-based fares. The prgram should save American about $200 million a year in distribution costs when it is fully put into effect, while allowing the agencies a greater variety of fares and products to offer its customers.
[P]Q3 Maritz Travel Solutions and Corporate Travel Management Group (CTMG) have agreed to be launch travel agency partners for the program, Carty said.
[P]Carty said the company is also aiming to end issuing paper tickets by the end of 2003 as part of its comprehensive plans to leave no stone unturned in looking for cost reduction. American has lost over $2 billion since the Sept. 11 attacks from the sharp drop in demand that dealt a severe blow to the entire airline industry.
[P]Carty reiterated testimony he gave to the U.S. Congress on Tuesday saying the U.S. airline industry will be near ruin if the government does not help it reduce insurance costs, taxes and other expenses related to aviation security.
[P]He warned that a war with Iraq would lead to higher fuel costs as well as a reductions in passengers, and deal a severe blow to an already reeling airline industry.[/P]
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