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CNN Live At Daybreak
American Airlines' Board Meets Today in Dallas
Aired April 24, 2003 - 06:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time for a little business buzz right now. American Airlines' board meets today in Dallas to discuss the company's future.
Susan Lisovicz live in New York with the latest on that, and it certainly doesn't look bright for them, does it -- Susan?
SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: Doesn't look bright for the company. And do you know what's also precarious these days is the situation of American Airlines' CEO Don Carty. So board members certainly will have a lot on their plates when they meet in Texas later today and tomorrow.
Among things that they'll possibly be discussing is filing for bankruptcy, possibly as early as tomorrow, if the airline and its union can't agree on its concessions. And of course the status of Carty is uncertain because labor unions are furious at him after the three major unions agreed to $1.8 billion in wage cuts. Shortly thereafter, it was disclosed about these special retention bonuses for top -- for top executives, including Don Carty.
Now on top of all this, yesterday, AMR, the parent company of American Airlines, reported a $1 billion loss. Carty himself called the company's earnings results truly dreadful.
And another interesting little detail, Carol, is that AMR cancelled its conference call, which is very typical after a public company reports its results, because of the fluidity of the situation. So very much an unfolding story down in Texas.
COSTELLO: You know I know that a lot is affecting the airline industry right now, but it's just mind boggling that a company could be a billion dollars in debt. I mean how does it get away from you like that?
LISOVICZ: Well there have been so many setbacks for the aviation industry, as you know. I mean everything from 9/11, when people simply didn't fly, to the recession, when so many businesses cut back. That's the most lucrative part of airline travel. Then you had the rising cost of fuel, huge expense for airlines. And then you had the war in Iraq and SARS on top of that. Then you have the situation with American, which was something that I think most experts agree probably could have been prevented because these special plans had actually been put in place some months before. So the timing was just terrible, and now American Airlines finds itself on the brink of Chapter 11.
COSTELLO: Just amazing. And I can see by this little screen at the bottom that the futures are down, so we'll talk more about...
LISOVICZ: Futures are down, but we've had -- we've had a good week so far -- Carol.
COSTELLO: Yes. Well maybe they'll turn back up later, who knows. Susan Lisovicz, we'll get back to you with more on that in a little bit.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired April 24, 2003 - 06:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time for a little business buzz right now. American Airlines' board meets today in Dallas to discuss the company's future.
Susan Lisovicz live in New York with the latest on that, and it certainly doesn't look bright for them, does it -- Susan?
SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: Doesn't look bright for the company. And do you know what's also precarious these days is the situation of American Airlines' CEO Don Carty. So board members certainly will have a lot on their plates when they meet in Texas later today and tomorrow.
Among things that they'll possibly be discussing is filing for bankruptcy, possibly as early as tomorrow, if the airline and its union can't agree on its concessions. And of course the status of Carty is uncertain because labor unions are furious at him after the three major unions agreed to $1.8 billion in wage cuts. Shortly thereafter, it was disclosed about these special retention bonuses for top -- for top executives, including Don Carty.
Now on top of all this, yesterday, AMR, the parent company of American Airlines, reported a $1 billion loss. Carty himself called the company's earnings results truly dreadful.
And another interesting little detail, Carol, is that AMR cancelled its conference call, which is very typical after a public company reports its results, because of the fluidity of the situation. So very much an unfolding story down in Texas.
COSTELLO: You know I know that a lot is affecting the airline industry right now, but it's just mind boggling that a company could be a billion dollars in debt. I mean how does it get away from you like that?
LISOVICZ: Well there have been so many setbacks for the aviation industry, as you know. I mean everything from 9/11, when people simply didn't fly, to the recession, when so many businesses cut back. That's the most lucrative part of airline travel. Then you had the rising cost of fuel, huge expense for airlines. And then you had the war in Iraq and SARS on top of that. Then you have the situation with American, which was something that I think most experts agree probably could have been prevented because these special plans had actually been put in place some months before. So the timing was just terrible, and now American Airlines finds itself on the brink of Chapter 11.
COSTELLO: Just amazing. And I can see by this little screen at the bottom that the futures are down, so we'll talk more about...
LISOVICZ: Futures are down, but we've had -- we've had a good week so far -- Carol.
COSTELLO: Yes. Well maybe they'll turn back up later, who knows. Susan Lisovicz, we'll get back to you with more on that in a little bit.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
