American Airlines CEO: How We Do Things Differently
It is safe to say that experts' views on American diverge more sharply than they do on any other airline.
While Stifel Nicolaus' Keay accepts the company's vision, Avondale Partners Bob McAdoo maintains that American, unlike other carriers, has gone backwards. American lost $10.7 million in the second quarter of 2010 after earning $317 million in the second quarter of 2007. "Other carriers didn't get worse since 2007, but American did," McAdoo said, in an interview. "I don't know why that is, but some organizations are just not oriented towards change.
Famously, JP Morgan analyst Jamie Baker criticized the company during the second quarter earnings call, saying: "You got the highest cost, you got the lowest margins. You're the only major airline expected to lose money this year. Your year-to-date equity performance has trailed that of your peers. I mean, in other businesses that I can think of, when there's a company standing out like this, you sort of expect, you know, a really major overhaul." But Baker subsequently recommended American stock.
Arpey said he is not bothered by criticism that he forsook profits to protect pensions and honor obligations."We take a long-term view," Arpey said. "We presume that we'll still be running the company a long time from now and the shareholders with us now will be with us then, and the shareholders will judge (what) we've done for the company and the other constituents." -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed
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