Partners in OneWorld Alliance Vital for American Airlines

American Airlines' international partnerships are vital to the long-term success of the airline as it increasingly focuses on foreign travel, said Gerard Arpey, the carrier's chief executive.

The chief executives of the airlines that make up the OneWorld alliance held a meeting in North Texas for the first time since the group's 1999 founding.

Fort Worth-based American is the largest airline in the partnership, which also includes British Airways, Finnair, Ireland's Aer Lingus, Hong Kong carrier Cathay Pacific, Spanish airline Iberia, Lan of Chile and Qantas of Australia.

Three additional airlines recently agreed to join the group, including Japan Airlines, Royal Jordanian and Hungary's Malév.

The alliance, which allows members to share frequent-flier plans and sell connecting tickets on each other's flights, contributed $500 million in revenue to American last year, Arpey said. And it allows American to connect U.S. passengers to 600 cities in 135 countries.

The OneWorld alliance competes with the Star alliance, which includes United Airlines, and Sky Team, which includes Delta Air Lines, Continental Airlines and Northwest Airlines.

American, like most major hub carriers, has been working to boost its international routes, which have more favorable profit margins than highly competitive domestic routes.

Arpey acknowledged that the stream of flights to foreign cities could heighten competition and reduce profitability on some of those routes. But he said he applauded any move that reduces airline capacity in domestic markets.

Arpey added that the airline industry remains enormously challenged, despite some recent reports from Wall Street analysts that predict a 2006 profit.

"The environment for all airlines remains very difficult," he said during a meeting with reporters.

Stock in AMR Corp., American's parent company, has risen in recent days on news of retreating oil prices. On Wednesday, AMR shares (ticker: AMR) were up 87 cents, or 6.5 percent, closing at $14.19 per share.

American also released its October traffic figures, reporting that traffic was up about 2 percent compared with October 2004. The airline's total available seats were down about 2 percent, and planes flew 77 percent full, on average.

Fort Worth Star Telegram


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