"CEO Warns of More Job Cuts at American Airlines"

Wednesday, November 3, 2004

CEO Gerard Arpey warns of more job cuts at American Airlines
The Associated Press


DALLAS (AP) -- American Airlines, struggling to compete with lower-overhead
carriers, will cut more jobs to reduce costs, chief executive Gerard Arpey
said Wednesday. 

 The company had already disclosed that it would lay off up to 650 mechanics
and 450 pilots, as Arpey reminded investors during a meeting in Fort Worth,
Texas. 

 "We will see more cuts across the board, all workers, in the months ahead,"
Arpey added. 

 American and other carriers are losing money as they are squeezed by high
fuel costs and tough competition that makes it hard to raise fares.
American's Fort Worth-based parent, AMR Corp., reported recently that it
lost $214 million US in the July-September quarter and expected an even
bigger loss in the fourth quarter. 

 AMR would have made money in the third quarter if fuel prices had remained
at last year's levels. Arpey said Wednesday that American would pay about
$500 million more for fuel in the fourth quarter than it did during the same
period last year. 

 "Were it not for Exxon getting most of our money this year, we would have
been able to make some progress," he said. 

 Arpey also blamed the airline industry's problems on carriers continuing to
add seats for sale, which has depressed fares. American has joined in the
rush -- increasing capacity by 2.3 per cent in October, although traffic
rose more, up 9.1 per cent. 

 UAL Corp.'s United, Delta Air Lines Inc. and Continental Airlines Inc. all
raised capacity in the third quarter compared to a year earlier. 
 "You would think these were very robust times for the airline industry,"
Arpey said. 

 American has said it would cut its U.S. flight schedule by five per cent
early next year. 

 On another issue, Arpey, who is also chairman and CEO of AMR, said the
parent company was still considering selling its investment subsidiary and
the commuter airline American Eagle. He added, however, that commuter
carriers are profitable while most of the so-called mainline airlines are
losing money.
 
 AMR shares closed down 21 cents, or 2.5 per cent, at $8.06 n the New York
Stock Exchange.


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