American CFO Mulls Consolidation

The chief financial officer of American Airlines(AMR Quote) says airline mergers are "fraught with difficulty," but they may nevertheless reshape the airline industry.

Although American is focused on cost control, "We've got to play the ground game and the air game," said CFO Tom Horton, in an interview Wednesday. "You can't ignore what's going on in the industry and how it may be reshaped by consolidation. So we look at that and give it a lot of thought."

Horton returned to American in 2006, after spending four years at AT&T(T Quote). There, he oversaw an evaluation of strategic alternatives that resulted in a merger with SBC, which retained the AT&T name. The merger "worked out pretty well," he said.

"As I think about other industries, consolidation is a natural part of the landscape, part of an evolution of the market," Horton said. "In the airline business, mergers are really complex [and] fraught with difficulty in terms of labor issues and other issues. There's a mixed record with respect to mergers in this industry."

Horton declined to comment specifically on American's intent. In the past, Northwest Airlines(NWACQ Quote) has been mentioned as a potential merger partner for American because of its strength in Asia.

At an investment conference in March, American Treasurer Beverly Goulet said: "Northwest has a very extensive Pacific network, and that's obviously something people presume that AMR might have an interest in."