Reuters
American Chief Sees Recovery Path in 2003
Monday December 23, 1:22 pm ET
DALLAS (Reuters) - In a rare bit of optimism, the chairman of American Airlines, a division of AMR Corp. said he sees the financially troubled carrier turning the corner next year through cost cutting and sticking to a recovery path.
By working together, I''m confident that we''ll be able to look back at this time next year and see the turning point -- the point where our road to recovery became smoother and our destination more certain, Don Carty said in a taped message issued over the weekend to employees at the world''s largest airline.
Through most of the year, Carty has painted a gloomy picture of American''s financial situation and the difficulties facing the airline industry. Airline stocks on Friday were mostly lower in New York trading as higher oil prices and the threat of war in Iraq put added pressure on the troubled sector.
Clearly, we have our work cut out for us in 2003. We must change our airline into one that can compete successfully in the new marketplace where low-cost carriers are king, Carty told employees.
He has said it was essential for the company to cut costs in order to compete against low-fare carriers such as Southwest Airlines in an industry struggling to recover from depressed demand after the Sept. 11 attacks on the United States.
We''ll create good times again because the alternative is just not acceptable, he said.
Last week, Carty said that as a financially depressed airline industry scrambles for cover in the wake of UAL Corp.''s United Airlines'' bankruptcy filing, AMR is also facing a cash crisis, but has the power to avoid declaring bankruptcy through cost-cutting.
Fort Worth, Texas-based AMR is seeking to cut costs wherever it can amid huge financial losses, with a goal of $3 billion to $4 billion in permanent reductions. American said it has already identified more than $2 billion in cuts.
AMR reported a third-quarter net loss of $924 million, after special items, as the lingering downturn stemming from the Sept. 11 attacks and anemic revenue in the industry walloped its bottom line. Despite the massive cost-cutting campaign, AMR said its fourth-quarter loss was likely to exceed that of the third-quarter.
American Chief Sees Recovery Path in 2003
Monday December 23, 1:22 pm ET
DALLAS (Reuters) - In a rare bit of optimism, the chairman of American Airlines, a division of AMR Corp. said he sees the financially troubled carrier turning the corner next year through cost cutting and sticking to a recovery path.
By working together, I''m confident that we''ll be able to look back at this time next year and see the turning point -- the point where our road to recovery became smoother and our destination more certain, Don Carty said in a taped message issued over the weekend to employees at the world''s largest airline.
Through most of the year, Carty has painted a gloomy picture of American''s financial situation and the difficulties facing the airline industry. Airline stocks on Friday were mostly lower in New York trading as higher oil prices and the threat of war in Iraq put added pressure on the troubled sector.
Clearly, we have our work cut out for us in 2003. We must change our airline into one that can compete successfully in the new marketplace where low-cost carriers are king, Carty told employees.
He has said it was essential for the company to cut costs in order to compete against low-fare carriers such as Southwest Airlines in an industry struggling to recover from depressed demand after the Sept. 11 attacks on the United States.
We''ll create good times again because the alternative is just not acceptable, he said.
Last week, Carty said that as a financially depressed airline industry scrambles for cover in the wake of UAL Corp.''s United Airlines'' bankruptcy filing, AMR is also facing a cash crisis, but has the power to avoid declaring bankruptcy through cost-cutting.
Fort Worth, Texas-based AMR is seeking to cut costs wherever it can amid huge financial losses, with a goal of $3 billion to $4 billion in permanent reductions. American said it has already identified more than $2 billion in cuts.
AMR reported a third-quarter net loss of $924 million, after special items, as the lingering downturn stemming from the Sept. 11 attacks and anemic revenue in the industry walloped its bottom line. Despite the massive cost-cutting campaign, AMR said its fourth-quarter loss was likely to exceed that of the third-quarter.
