Wednesday, August 24, 2005

American: The Best of the Legacy Carriers?

While United and US Airways are in Chapter 11 bankruptcy, Delta and Northwest are on the verge of filing, and the rest of the industry is being from high oil prices, pensions, etc., one major US airline seems to have pulled ahead from the rest: American. It is probably the best-managed of the legacy carriers.

Let's start with it's CEO as an example. Gerard Arpey took over the reins in early 2003 after ex-CEO Don Carty resigned when it became known that he accepted large bonuses when he was trying to wring out concessions from everyone else, and the company was on the verge of bankruptcy. Since then, Arpey has refused pay raises, stock options and bonues, because he claimed that with employees making so many sacrifices, it "just didn't feel right". He's listened to the employees and welcomed their suggestions for cost-cutting measures, and this helped American post a $58 million profit in the second quarter this year.

Of course, his company isn't as successful as, say, jetBlue or Southwest. But it's not bad for a legacy carrier - especially compared to how United, Delta, Northwest, et al. are doing now.

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