American Airlines head: It's more than just new paint
(CBS News) When American Airlines CEO Tom Horton appeared before the press on Thursday, he didn't announce the beleaguered airline had emerged from bankruptcy or that it would merge with another airline; instead, he revealed a new logo and a bold new plan to re-brand the iconic airline.
"We've been modernizing everything about this company, starting with our entire fleet of airplanes," he said.
American Airlines is undergoing a surprise makeover. The extensive effort includes painting more than 600 planes - 550 of them brand new. There will be new kiosks at every airport, all-new uniforms, improved cuisine for passengers, and advanced technology for flight attendants.
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Yet some people who are keeping the airline flying through Chapter 11 are wondering if the company has its priorities straight.
Speaking one-on-one with CBS News travel editor Peter Greenberg, Horton said it was a strategic decision on his part to change the image of the airline. "But it's more than that -- it's about creating a more modern and refreshing travel experience for our customers. So all the things we have been doing have been building up to that."
But for all the fanfare, perhaps most surprised by the announcement were the employees who recently agreed to contract concessions.
"American Airlines management is very concerned about rebranding this airline and rolling out this new plane for their customers -- and that's all good, but it's only putting fresh paint on a house with a bad foundation," said Scott Shankland of the Allied Pilots Association.
It's a foundation fraught with a bankruptcy filing in 2011 and bitter negotiations that go back years with the carrier's ground workers, pilots, and flight attendants.
Laura Glading, president of the Association of Professional Flight Attendants (APFA), said the airlines wanted "everything" from them in their negotiations. "I testified in court by saying, 'Look. If you want to shoot us in the head, go ahead and shoot us in the head. But don't hand us the gun and ask us to do it ourselves.'"
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To make matters more complicated, Horton is still dealing with a merger proposal from rival US Airways, which all three of American's unions supported.
"After seeing what they proposed, I thought this is absolutely the way we have to go, both for US Airways and for American, to survive and compete," said Glading.
Amid all this contention -- for two years, in fact -- American Airlines was secretly planning a major relaunch of their brand, the first in 40 years, an expensive and expansive makeover that included painting planes inside a secret hanger at an abandoned military base in Victorville, Calif.
Horton responded to the suggestion that painting planes and redoing logos may not be enough.
"Well, I think that's true," he told Greenberg, "because there are so many other things we've done as part of this restructuring in terms of getting our cost structure in line, getting our capital structure sorted out, and then building for the future."
Merger and new image aside, 2012 was a transformative year for Horton at American. Annual revenues were the best in company history (at nearly $25 billion); they hired 1,500 new flight attendants; and ultimately came to terms with pilots who late last year demonstrated against the airline and caused record delays and cancellations.
"Getting those contracts in place now allows you to go back to the judge and say, 'We can now come out of bankruptcy'?" asked Greenberg.
"That's right, yeah, we're now at the tail end of the restructuring process," said Horton. "And the company is poised to be very successful and profitable going forward."
Still, labor isn't convinced Horton's team can lead American into the future.
"Do you have any confidence in the American management team?" Greenberg asked AFPA's Glading.
"Uh," she sighed, "I hate to say it, but I don't -- you know, I'm willing to listen. I've always said I'm willing to listen. I've told the American team that."
"That wasn't my question," Greenberg pushed.
"Yeah, I guess I can -- not right now, I don't, no. I don't, I really don't," Glading said.