American Airlines Outlines Financial Improvement Plan
The additional cash flow will reportedly enable American to renew its fleet and to invest several hundred million dollars per year in ongoing improvements in products and services. Tom Horton, chairman and CEO, said: "American Airlines is moving forward decisively.
The plan we are outlining today provides the framework for a new American Airlines, positioned to succeed in an intensely competitive industry that has been transformed by our competitors' recent restructurings. "Just as other airlines have done and will continue to do, we must invest restructuring-related cost savings in ongoing innovation and customer service improvements that drive revenue. The airlines that have failed to adapt to these changes are no longer in business. Change will be difficult, particularly as we will be ending this process with fewer people, but it is a necessity. American is ready to compete and win." American's plans build on initiatives already in place that reportedly reduced costs over the past several years, including changes to its route structure, network, capacity and fleet. Utilizing the benefits of the restructuring process, American intends to realize additional savings over the next six years by restructuring debt and leases, grounding older planes, improving supplier contracts, and undertaking other initiatives. A central element of American's transformation is the overhaul of its fleet, which will reduce fuel, maintenance, and financing costs, and provide improved profitability and growth over time, by enabling American to better match the right equipment to the right routes, the company said.
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