FORT WORTH, Texas, May 21 (UPI) -- American Airlines new chief executive officer Wednesday announced turnaround plans for the world's largest airline that include new low fares and more seats on select routes.
Gerard Arpey unveiled new details of the $4 billion annual cost-cutting plan at the airline's annual shareholders meeting, saying it would preserve the carrier's network strength, provide customers with value and ensure long-term competitiveness.
"With $4 billion in the process of being removed from our cost structure, American Airlines is going to be a leaner, stronger and more agile competitor," he said.
Arpey cited four principles of the plan: lower costs to compete, fly smart by giving customers what they value, pull together, win together, and build a financial foundation for American's future.
To compete with low-cost airlines, Arpey announced American would charge no more than $299 for coach seats on nonstop flights between New York's JFK airport and selected California cities. He said the move makes it "crystal clear" that customers can find low fares and more service on American.
In a partial rollback of its program to remove seats to give passengers more legroom, Arpey told shareholders the airline would be reintroducing standard seating to 23 percent of its fleet. Standard seating will be returned to the carrier's 140 Boeing 757 and 34 Airbus A300 aircraft, with the switchover beginning this fall.
"We are simply returning to standard seating in those markets where customers tell us price -- and seat availability at low prices -- is predominantly how they choose a carrier," he said.
Arpey thanked employees for the contributions they have made during the past two years to help the airline survive. In April, unions representing pilots, flight attendants and ground workers approved nearly $1.8 billion in wage and benefit concessions that kept the company from filing for bankruptcy.
"Despite our difficulties as a company, I am more impressed than ever with the team we have," he told shareholders. "Our people have gone through a tumultuous restructuring, and they demonstrate over and over again how much they love this airline."
Arpey pledged to shareholders, customers and employees that the management team is committed to "dramatically improve the profitability of our business" and that goal will "be at the forefront of every decision we make." He and other officials will be visiting employees around the system in the weeks and months ahead to offer more insight into the future of the airline which serves more than 250 cities in 41 countries and territories with about 4,300 daily flights.
