American Airlines 2000 Annual Report Download - page 6

TWA’s
obliga-
tions.
Second,
American
will acquire
certain key
strategic assets
from US Airways,
including 14 gates, 36 slots
and 86 aircraft. We will also lease the
gates and slots necessary for us to share
the operation of the Northeast Shuttle with
United Airlines. Under the terms of this
transaction, we have agreed to pay $1.2
billion in cash to United Airlines and to
assume approximately $300 million in air-
craft operating leases. And third, American
will acquire a 49 percent stake in DC Air, a
new-entrant carrier operating out of Wash-
ington Reagan Airport. DC Air – to whom
we will wet lease up to 14 Fokker 100 air-
craft – will participate in the AAdvantage
program, and American will have a right of
first refusal on the acquisition of the
remaining 51 percent of the new airline.
The consummation of the DC Air transac-
tion, as well as our acquisition of assets
from US Airways, is contingent on the
closing of United’s proposed merger with
US Airways.
These three transactions mark the
beginning of an exciting new chapter in
American Airlines history and represent
a very positive outcome for all three of
our constituency groups. For our employ-
ees, these are terrific developments. We
are growing the airline in a way that will
bring a wealth of hiring and promotional
opportunities for the people of American.
For our customers, the benefits of a
much broader network are clear. Our best
customers – both individuals and large cor-
porate accounts – increasingly expect their
airline of choice to take them everywhere
they want to go. We are determined to cre-
ate a domestic and international network
that is second to none. But at the same
time, we do not intend to add more capac-
ity to the industry than the growth in
demand can justify.
Our shareholders will be happy to
know that these transactions will enable
us, in a very economical way, to dramati-
cally grow our airline without introducing
incremental industry capacity. For a com-
mitment of just over $5 billion, we are
adding more than 270 airplanes to our
fleet and acquiring a wealth of other
assets in critical and strategic parts of our
network. There is no other series of deals
we could have made that would have
given us this much breadth and strength
for the amount of money we have commit-
ted. Moreover, even with $5 billion com-
mitted to these transactions, AMR’s balance
sheet remains one of the strongest in the
airline industry.
As always, the forecast for the year
ahead contains a few unknowns, including
the direction of both the U.S. economy
and the price of jet fuel. Nonetheless,
I believe AMR is in excellent shape to
handle whatever 2001 has in store for us.
Demand for our product – which we are
working hard to improve – continues to
grow. We’re committed to building a pre-
mier global network. We’ve got the best
team of employees in the business, and
new technologies are enabling all of us
to do our jobs better and more profitably.
Add it all up, and I believe that we
have, in American and American Eagle,
a very powerful and well-positioned fran-
chise. And you have my assurance that all
of us will be working hard in 2001 – to
build on our 2000 success and to create
positive outcomes for our customers,
employees and shareholders.
Donald J. Carty
Culture leadership is a
strategic imperative
every bit as important
as the other five areas
of the A irline L ead-
ership Plan.
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