Bankrupt American Airlines remains optimistic

Photo courtesy Bloomberg

American Airlines CEO Tom Horton is an optimistic man. Facing a string of yet unresolved issues, he said at a press conference in New York that American would emerge stronger from bankruptcy reorganization. (See American Airlines flies into stormy weather, Oct 8, 2012).

Thousands of American customers had in the past weeks, which Mr Horton admitted to be rough times, been inconvenienced by flight delays and cancellations due to mechanical problems and the ongoing dispute between the airline and its pilots, all these added to its current bankruptcy woes. Consequent to the discovery of loose seats in the air, American 48 Boeing 757-200s for repair of the faulty seat lock plunger mechanisms.

Picture courtesy American Airlines

Mr Horton said American would emerge as a “brand new company with one of the youngest fleets in the industry.” He has plans to acquire more than 500 new aircraft, but only after the airline creeps out of bankruptcy. A takeover by USAir has been on the cards, but Mr Horton is not particularly enamoured by the prospect. Although both USAir and AMR Corp (which owns American) had earlier announced they had signed non-disclosure agreements, apparently they are still talking.

However, Mr Horton has friends in the industry. OneWorld partner British Airways CEO Willie Walsh said IAG (which owns BA and Iberia Airlines) would consider taking up a minority stake of not more than 10 per cent in American – if Mr Horton so much as asked. Speaking clearly in support, Mr Walsh said: “A stronger AA not only benefits its customers, employees and shareholders but it also benefits its partners.”

Meanwhile, the dispute with its pilots continues to affect American’s on-time performance. It is of course not good publicity for American when pilots are alleging that its fleet is facing mechanical issues as American outsources maintenance jobs. The union representing its workers have pointed a finger at third party work for the loose-seat problem.

But, as we pointed out, Mr Horton is an optimistic man. He said: “We’ll get past this just like other airlines before us have.”

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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