Horton Shares Credit with Arpey for Successful American Bankruptcy
DALLAS (TheStreet) -- As he prepares to conclude a two-year-run as the last CEO of pre-merger American (AAMRQ.PK) with strong second-quarter results, Tom Horton is crediting predecessor Gerard Arpey with building the base for a successful restructuring.
"Gerard deserves more recognition for getting the company on course for a successful future," Horton said in an interview on Thursday, in which he also credited American's 73,000 employees. "Much credit goes to him. I saw him two nights ago. He is pleased to see the new American taking off."
When American filed for bankruptcy protection in November 2011, Arpey retired despite being asked by the board to continue. The American bankruptcy is considered to be among the most successful in the history of the airline industry, where bankruptcies have been frequent.
Horton was asked Thursday whether he envisioned where American would be today when he returned to the carrier as Chief Financial Officer in April 2006. At a news conference then, he said he had been bonefishing in the Bahamas when Arpey asked him to return.
"I didn't foresee a restructuring, of course," Horton said. "I did see a lot of hard work to get American Airlines back on top. Gerard and I thought that American Airlines' place in the industry was on top. I would credit Gerard with doing much of that (work) -- building alliances, making OneWorld what it is today, doing much of the work around cost structure and network, and launching the boldest modernization in our company's history. That set the course for what the new American Airlines would be. That was all done under my predecessor."The final piece was getting our cost and capital structure in line," he said. "That's what the restructuring was all about." In its second-quarter results reported Thursday, American said that cost per available seat mile excluding fuel and special items decreased by 5.8%, driven by restructuring efforts. American likely closed out its run in bankruptcy with one of the best second quarters in its history, reporting a net profit excluding items of $357 million. A planned merger with US Airways (LCC) is expected to close in the current quarter.
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