American Airlines

December 10, 2013

New American CEO: No immediate plan to divest Eagle

In an interview, American Airlines CEO Doug Parker says the airline’s new management team hasn’t studied selling regional carrier and has not made a decision on whether to stick with the new livery design for its planes.

Doug Parker discussed a range of issues when he sat down with the Star-Telegram last week as he prepared to take over as chief executive of the new American Airlines following its merger with US Airways. Here are some excerpts.

On American Eagle’s future: “We’re closing the transaction with Eagle as subsidiary of the airline and that’s what they’re going to be. … Divesting is not something we have even thought about looking at. I’m not saying we won’t one day but we have much, much more to do than spend our time worrying about whether or not we should spin that airline out or not. We haven’t done a bit of work on that and I don’t expect we will for some time. They are part of the airline.”

On American’s new flag livery: “No comment on the livery. That is one of the things we have to decide. … I think it’s really well done. I think it looks great. I think it has a very nice look to it. I’m happy to say this. I do think that airline executives spend far too much time worrying about the livery of the airplane. The customers don’t care about it. I don’t want to fall into that trap and spend all my time worrying about liveries. I’m not. It’s important to the brand so it needs to be consistent with the brand. It’s important to our employees so I care about what our employees think. But, you know, that is not near the top of the list of things we’re worrying about right now.”

On his relationship with outgoing CEO Tom Horton: “Tom’s been great. I know again to the outside world this looks like Doug versus Tom. But the reality has been from the start we had a disagreement … maybe not so much about the merger being done, but when and under what terms. But, you know, once Tom got to the point that this made sense and his board decided it made sense for the company and their investors, he’s been all in and he’s been really good … With the DOJ filing the lawsuit, it required Tom and I to work really closely together for the last few months to fight that off and I’m glad. … He’s a great guy and all he cares about is American Airlines and I think he has come to the conclusion that this was the right thing for American Airlines and doesn’t care what it means for him. He cares more for what it means for the company and feels it’s the right thing and it was nice fighting off the lawsuit with him.”

On the company’s large cash balance: “It’s one of the really nice things about the merger. We’ve now got the company, both companies, in a position where we can withstand the shocks that this industry seems to face fairly regularly. We’ll have both a significant amount of cash on hand and we’ll have less debt than other companies. … Having cash sitting on the balance sheet earning less than 1 percent in today’s world is not a good use of that much cash so if we can pay down debt, invest it in the airline in a way we can get a return, that’s what we’ll do.”

On keeping premium customer initiatives launched by American in 2013: “American flies a lot of markets that US Airways doesn’t fly, like London Heathrow, like [the transcontinental] market that does have a different service level than some of the routes we fly, and of course we’ll be competitive with service levels on those markets. We need to be. Therefore, what you’ll see in the products of the new American will be very similar to the product you saw and the product enhancements you saw coming through the existing American because they make sense for the airline.”

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