American Airlines Wants Piece of the Pie


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Of course it isn’t actually feasible that the airlines need money from the government’s stimulus plan that is designed to bring aid to failing Wall Street businesses that are filing for bankruptcy…or is it? American Airlines chief executive Gerard Arpey believes so. Arpey doesn’t expect the government to shell over any cash directly to airlines like American, but believes the airline industry “should certainly be at the top of the list…”

This commentary follows on the announcement of President-elect Barack Obama’s proposal for a $700 billion program which will include some public works projects.

It isn’t clear exactly how much Arpey thinks the aviation industry should receive. It is clear, however that American isn’t exempt from the hardships that Wall Street has faced. The airline giant showed signs of distress earlier in the year when it announced that fares would be increased and passenger capacities would be cut. Still, one has to wonder with all of the fees and already high prices, does the aviation industry merit the same consideration.

According to Arpey, who spoke to reporters after participating in an executive panel that spoke to the Dallas Business Journal, the infrastructure of the aviation industry has begun to deteriorate in terms of both traffic control and on the ground environments. Arpey believes the aviation industry is not exempt from needing a portion of the stimulus that the government is proposing and suggests that such a stimulus package could include assistance for repairs to airport runways, control towers, cargo facilities, upgrades to their air traffic control system and security enhancements for passenger facilities.

According to the International Air Transport Association, airlines around the globe will lose $2.5 billion next year. Arpey believes that equates out for American Airlines to some of the worst revenue scenarios that have been seen in more than 45 years. Arpey attributes some of the crunch American is feeling as being due to the almost seamless transition from the rising costs crisis in fuel to a possible demand in air travel crisis.

One thing is certain, whether the government plans to provide any stimulus funding to the aviation industry or not, American Airlines won’t stand around and wait for the ceiling to fall and plan to take further steps to minimize the effects of the economy.

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