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AMR Reports Profit Gain, Change at Top

April 16, 1998|From Reuters

AMR Corp., the parent of American Airlines, said Wednesday that profit surged 91% in the first quarter and that Chairman Robert Crandall, who helped reshape air travel in North America, will retire.

Crandall, 62, joined American Airlines in 1973 and led the carrier through the turbulent years after federal deregulation of the industry.

Innovations that Crandall helped pioneer include computer reservation systems and frequent-flier programs that most major airlines use today as marketing tools.

"Bob Crandall represents the best and the worst after deregulation. He was a ruthless competitor on the one hand, but a visionary on the other," said Kevin Mitchell, head of Business Travel Coalition, an industry watch group.

Under Crandall, the airline tangled with the Justice Department in a 1983 dispute over traffic monopoly at its Dallas-Fort Worth Airport hub and survived a 1993 strike by its flight attendants and a brief strike last year by its pilots.

AMR said Donald Carty would succeed Crandall in May as chairman and chief executive of the company while retaining his position as president of American Airlines, the nation's second-largest carrier.

"Don's skills are negotiations, forging things such as labor agreements and alliances . . . the skills that America needs today, so I think it's a very good choice," CS First Boston analyst Tom Schreier said.

AMR said its first-quarter net income rose to $290 million, or $3.24 a diluted share, up 91% from $152 million, or $1.65 a share a year earlier, and topping Wall Street's forecasts of $2.54 a share. It also announced a 2-for-1 stock split.

AMR stock jumped $6.63 to a record $153.88 on the New York Stock Exchange.

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