With the last of its labor contracts ratified by the pilots Friday, AMR Chief Executive Tom Horton says the Fort Worth carrier’s financial restructuring is complete and that the company can now focus on whether it should remain independent or merge with US Airways.
Horton said a decision on “strategic alternatives” will come soon, although he would not specify a time line. US Airways presented a merger option to AMR and the unsecured creditors committee in mid-November.
What’s also unclear is whether or not Horton will be the one to lead American Airlines out of bankruptcy. US Airways CEO Doug Parker has said he wants to operate the new combined carrier if there is a merger. A group of ad hoc bondholders have said it will provide financing for a stand-alone American but wants to pick a new board of directors to run the airline.
"It’s not about me," Horton said during an interview on Monday, adding the decision lies with the board of directors. "I've been very focused on creating the best outcome for our owners, the best outcome for our people and our customers."
Although its November revenues were hurt by the weather, Horton said the company has improved its financial results in the second and third quarters. He anticipates growth next year as it adds to its network and receives 60 new airplanes as part of a large plane order with Boeing and Airbus announced last year.
Here are excerpts from his interview with the Star-Telegram:
S-T: When do you think AMR will emerge from bankruptcy?
Horton: I think it depends on whether we pursue a combination inside of restructuring. As you know, as we’re bringing our restructuring to a close, we are also completing a review of strategic alternatives. We have a nondisclosure agreement with US Air as you know, for all the reasons I described, we are very confident the new American will be strong and will be a great foundation for the future. The question then is whether a combination can create value for our owners and a positive outcome for our people and our customers. And that’s what we’re evaluating now. I expect to have a conclusion on that soon...All of the restructuring work is effectively complete. The financial restructuring, the labor contracts, all of that. We’re now at a point where we have to complete this final task and that will dictate the time of exit.
S-T: What do you mean by you will have a decision “soon”?
Horton: The great thing about using the word “soon” is people can let it mean what they want it to mean. I can’t be any more specific than that.
S-T: In your Friday letter to employees, the tone of the letter suggested you may be more open to the possibility of a merger. Is that different from previous employee communications?
Horton: I don’t think those things are inconsistent. I think they’re very consistent because what I was saying early on and what I would say again today is we had to stay very focused on getting our own house in order and that was our job. Earlier on in this process, it was way premature, in my view, to be talking about mergers. I think that was a distraction. But as we come to the close of the process here, we now have line of sight on our revenue generation capability and we have line of sight on what the new company will look like....It’s all about timing and proper sequencing and I think it’s now right. So we have to answer those questions. But in any case, my view is the new American is going to be strong. Whether we pursue a combination now, later or never, this company will be very successful. There is no doubt in my mind.
S-T: And will you be leading the new American?
Horton: I serve at the pleasure of the board so that’s really going to be up to the board and the new world order here. It’s not about me. I’ve been very focused on creating the best outcome for our owners, the best outcome for our people and our customers and, in that regard, I’m very proud of the job our entire team has done and I’m entirely focused on completely that task.
S-T: How did you feel when you heard the pilots had ratified the contract by 74 percent?
Horton: That was a big vote and I think it surprised a lot of people. It’s a good contract for our pilots and it’s a good contract for our company and it will, I think, serve our pilots and our company well. It will help lead to a very successful, profitable, growing company which is, of course, in our pilots’ interest. I know a lot of people were surprised, but it was a good deal.