Wait -- who's Tom Horton (no, not a Canadian coffee shop), and what has he done with Gerard Arpey? Oh, Arpey's out -- decided to "retire," per the statement from Fort Worth-based AMR that follows in the wake of its Chapter 11 filing in NYC court this morning. (Though some say the board asked him to stay.) Horton's the new HMIC, and he says that filing for bankruptcy was right ... and inevitable:
"As we have made clear with increasing urgency in recent weeks, we must address our cost structure, including labor costs, to enable us to capitalize on these foundational strengths and secure our future. Our very substantial cost disadvantage compared to our larger competitors, all of which restructured their costs and debt through Chapter 11, has become increasingly untenable given the accelerating impact of global economic uncertainty and resulting revenue instability, volatile and rising fuel prices, and intensifying competitive challenges."
But fret not: The airline will use some of the $4.1 billion in unrestricted cash and short-term investments it has on hand to keep the Admirals Clubs open and "fully maintain our AAdvantage frequent-flyer and other customer service programs."
Now's a good time, unless you work for AMR, to dig into this new AP Q&A with former American senior veep David Cush, now in charge of Virgin. For our purposes this morning, begin here:
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In Dallas, you're telling fliers to "dump your older airline for a younger, hotter one." American responded by slashing fares to San Francisco and Los Angeles. Can you survive this fare war?
We'll survive. At current fares, it will not be a profitable route but it wouldn't be such a loss-making one where we would consider any type of reduction. You have to be in Dallas-Fort Worth if you're going to be a business airline.