progress” and “significant accomplishments” at AMR Corporation over the
past year, Gerard Arpey, the company’s President and Chief Executive
Officer, said at AMR’s Annual Shareholders Meeting here today that much of
the credit for these gains goes to AMR’s people. Arpey also unveiled a new initiative under the airline’s four-part
Turnaround Plan, announcing plans for modifications on former TWA MD80
aircraft to make them consistent with the rest of American’s MD80 fleet.
The changes, based on flight attendant and customer feedback, include
installing powerports in every First Class seat on the former TWA MD80s,
and an additional 45 outlets in every Coach Class cabin on those
airplanes, and outfitting the former TWA MD80s with larger overhead
storage bins for customer items. Installation of the powerports and
overhead bin extensions will be completed by the fall of 2005.
As Arpey reviewed the year’s improvements for shareholders, he paid his
strongest tribute to the airline’s people.
“While much work remains to return AMR to financial health,” Arpey said,
“we have nonetheless made tremendous progress during the past year. This
progress is first and foremost a tribute to our employees, who have not
only sacrificed, but devoted themselves to the mission of transforming our
airline into one that can compete and win in the much-changed aviation
The magnitude of AMR’s financial improvement over the past year is
underscored, Arpey said, by its cash reserves of more than $3.7 billion,
the significant improvement in its stock price, AMR’s access to the
capital markets, the positive cash flow being generated by its operations,
and its first quarter financial results. Those results were highlighted by
AMR’s third consecutive quarter of operating earnings and a net profit in
March—all despite extraordinary fuel-cost increases.
At the same time—and again despite the enormous spike in fuel costs—
American’s cost per available seat mile declined 16 percent from a year
ago, making its unit costs among the lowest of the network carriers.
All of these strides were achieved, Arpey said, by combining the hard work
and dedication of AMR’s people with a broad array of initiatives under the
Turnaround Plan, the latest example of which is the passenger-cabin
modifications to the MD80 aircraft.
“The progress we have made this past year could accurately be described as
the cumulative effect of our aggressive cost savings and strategic
initiatives coupled with the thousands of good ideas that have bubbled up
from employees throughout American to help our company succeed,” Arpey
During the Annual Meeting, it also was announced that Arpey, who has been
AMR’s President and Chief Executive Officer since April 2003, also was
named Chairman by AMR’s Board of Directors.
Edward A. Brennan, a long-time member of AMR’s Board who was named
Executive Chairman of AMR and American in April 2003, will remain on AMR’s
Board and will return to the role of Lead Director that he held before
being named Executive Chairman. The lead director is the principal liaison
between management and the Board.
In announcing Arpey’s appointment as Chairman, Brennan said the
circumstances at AMR have changed dramatically over the past year.
“We have made great strides under the Turnaround Plan—although we still
have much more work to do, we are clearly on the path to a much brighter
future. The Board has complete confidence in the AMR management team. We
look forward to celebrating with you our company’s future success,”