FORT WORTH (AP/CBSDFW.COM) – A new executive is taking the helm at American Airlines parent AMR Corp. as the nation’s third-largest carrier heads into Chapter 11 bankruptcy protection.
After a little more than a year in the role of president, Thomas W. Horton will take on the additional role of CEO. He’s replacing Gerard Arpey, who told the board late Monday he will step down.
At a press conference Tuesday at American’s DFW International Airport Terminal D, Horton told members of the media the airline was in flux. “We’re now at a point where its time to turn the page and move forward. Circumstances have changed and its time for us to move the company forward.”
Horton, 50, was first named president of AMR and American last July. Before that, he was executive vice president of finance and planning as well as its chief financial officer. He was named to that role in March 2006 when he returned to the airline from Dallas-based AT&T Inc., where he had been vice chairman and chief financial officer.
Horton originally joined the airline in 1985, holding a number of senior financial executive roles. From 1998 to 2000, he was vice president responsible for the airline’s European business.
He became CFO and senior vice president in 2000.
On Tuesday he said the company is saddled with labor costs nearly $800 million higher than competing airlines. Financial analysts predicted the bankruptcy, saying its the only way american can cut costs and stay competitive. Analysts say American hopes to use bankruptcy to negotiate financially favorable contracts with its pilot. Soaring fuel costs and a sagging economy also pushed the airline to the financial brink.
“So there were a lot of forces buffeting the company. And in fact this year we will pay more than 2-billion dollars in fuel prices we didn’t pay last year. And that was a kick in the teeth we didn’t need this year,” Horton said in Tuesday’s press conference.
American says it will be business as usual for customers. Horton says less profitable routs and some employees may be cut due to restructuring.
As CEO, Gerald Arpey received compensation valued at more than $5.2 million last year, an 11 percent increase over 2009, according to an Associated Press analysis of a regulatory filing. The boost in Arpey’s compensation was almost entirely due to higher values on stock grants and options at the time they were granted. The board of AMR said Arpey’s compensation was below that of most leaders of similarly sized companies ranging from retailers to defense contractors.
Arpey, 53, was CEO since 2003 and chairman since 2004.
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