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American Airlines said today it will not seek a government loan available under the terms of legislation passed last year. The loan application deadline is tomorrow.
"The loan guarantee program was created as a vehicle of last resort for airlines that could not reasonably access the financial markets as a direct result of the events of September 11," said Jeffrey Campbell, American’s senior vice president and chief financial officer. "We do not believe American would qualify under the guidelines of the Air Transportation Stabilization Board.
"We are fortunate to be among the carriers that have sufficient cash, unencumbered assets and continuing access to external capital to operate without federal assistance. We believe it is unnecessary and would be inappropriate to apply for a federal loan when private capital is clearly available, especially given the terms that the Board would require," Campbell said.
American has cut several billion dollars from its costs and capital spending in the months since Sept. 11, and is in the midst of a comprehensive review of every aspect of its business in an effort to find additional cost savings through simplicity, automation and greater efficiency.
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