American Airlines Loses $3.3 Million Per Day
Fortune:
Just as the Boeing 737 started its initial approach into Washington's Reagan National Airport, Gerard Arpey asked for my pen and pad. Arpey, the polished chief executive of American Airlines, was on his way from Dallas to brief FAA administrators about the maintenance issues that had recently grounded nearly half his fleet. But as the seatbelt sign went on, his mind turned to the industry's recent merger mania.
"While mergers may play a role in solving some of the fragmentation and capacity problems that plague the industry," he scribbled, "they are not the panacea for solving all the industry's problems and may create a few new ones." Then he looked at me, smiled, and said, "But that doesn't mean we aren't looking or don't have options."
Then, as if it had been timed, we hit a patch of turbulence.
That's a gentle word for what American's CEO has experienced of late. In the past month Arpey, 49, has dealt with picketing pilots calling for his resignation, FAA inspectors decertifying 300 aircraft, the merger of two large competitors, and $110-a-barrel oil that contributed to a $328 million loss for the first quarter. Since January, nearly every flight the airline has flown has lost money - analysts estimate it is losing $3.3 million a day.
Loading comments…
First Posted: 04-29-08 10:10 AM | Updated: 05- 7-08 05:12 AM