AIRLINES American to add coach seats, limit some fares

The American CEO declines a pay raise, and a chairman will forgo his salary.
FORT WORTH, Texas (AP) -- There's less room coming to coach at American Airlines, which plans to restore seats to some of its jets and limit fares on a few cross-country routes.
The decisions are part of a campaign to restore the world's largest carrier to profitability, although new chief executive Gerard Arpey declined to predict Wednesday when that would happen as he addressed American shareholders.
Investors and employees gave Arpey -- who assumed the job last month -- a cordial reception. But some said the company needs bigger changes to reverse more than $6.2 billion in losses since the beginning of 2001, including $1 billion in the first three months of this year.
Arpey said he would decline a pay raise tied to his promotion, and chairman Edward Brennan said he would forgo his salary.
Brennan also suggested that American might not pay severance to former CEO Donald J. Carty, who quit under fire after delaying disclosure of bonuses and pension perks for senior executives.
Bankruptcy still possible
American is still in danger of filing for bankruptcy, officials have told regulators, but Arpey said the company's finances were boosted this month by $360 million in federal aid to airlines.
Arpey said he was encouraged by June bookings, which appear stronger than last year.
Wednesday's announcement on adding seats to many planes marked a retreat from one of Carty's major initiatives. American launched the "More Legroom in Coach" promotion in 2000 to lure high-paying business travelers by removing seats from all planes.
But business traffic dropped during the 2001 recession, and American was left with less capacity than rivals flying the same jets.
American will add back 12 coach seats to all 140 of its Boeing 757s and 16 seats to its fleet of 34 Airbus A300s, which operate mostly in the Caribbean.
The changes will cost $10 million and cover 23 percent of the fleet by next February, he said. Analysts expect American eventually will reconfigure far more planes.
The fare limits -- $299 each way in coach and $599 in first class -- apply only to a few nonstop, cross-country routes, including those between New York's JFK airport and San Jose, Long Beach and Orange County, Calif.
Those are routes where American faces tough competition from JetBlue Airways, a low-fare carrier that has made a heavy push into California.