American Airlines CEO Resigns

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Last updated at: (Beijing Time) Friday, April 25, 2003

American Airlines CEO Resigns

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American Airlines Chairman and Chief Executive Officer (CEO) Donald J. Carty resigned on Thursday after the world's largest airline finally reached an agreement with its unions over cost-saving plans to avoid bankruptcy.

The company on Thursday released the news on its website, announcing that Gerard Arpey, the company's president, will replace Carty as the CEO, while board member Edward A. Brennan will take over as the chairman.

Analysts said the shake-up could be attributed to a string of events related to cost-cutting inside the company, which happened over the past weeks. Carty had been sharply criticized for his silence over executive perks -- the airline's unions of special pension trust funding and retention bonuses for executives -- while workers were accepting deep wage cuts.

The company said that Carty's successor, Arpey, 44, has devoted his entire professional career to American Airlines, where he began as a financial analyst in 1982 and became a corporate officer in 1989. Brennan, 69, is the retired chairman, president and CEO of Sears, Roebuck and Co..

In order to stay in business at a time when almost the whole USairline industry is in financial difficulties, American Airlines announced to carry out a 1.8 billion-dollar cost-cutting package earlier this month.

Because the flight attendants union did not agree to deep pay cuts by a deadline on Thursday afternoon, the American Airlines may still file for Chapter 11 bankruptcy protection in New York inrecent days.

The timing depends on whether the flight attendants go ahead and accept the concessions.

Analysts said that if the flight attendants approve the cuts, it was still possible the airline could avoid a quick bankruptcy filing.

Airlines have been suffering through the worst crisis in their history since the Sept. 11, 2001, terrorist attacks against the United States hurt travel. Since then the airlines have suffered one setback after another, including higher fuel prices, the Iraq war and a new pneumonia-like virus that has crippled travel.

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