Safe in the Skies?

This is a partial transcript from "Your World with Neil Cavuto," June 8, 2004, that was edited for clarity.

NEIL CAVUTO, HOST: Meanwhile Al Qaeda getting ready to launch what it claims could be attacks here in this country and on Western airlines, this according to a statement released by the terror group on its very Web site. So how does the world’s No. 1 airline really handle such threats?

With us now is James Beer, he is American Airlines’ chief financial officer and a senior vice president.

Sir, good to have you.

JAMES BEER, AMR CFO (AMR): Good to be with you, Neil.

CAVUTO: How real are these threats?

BEER: Well, very tough to say, certainly we have not seen any material change in our booking pattern as a result. And indeed it was interesting to see a few weeks back when the Madrid railway bombing occurred, that we, again, didn’t really see any marked fall-off in customers’ interest in traveling to Madrid.

CAVUTO: So I’m wondering now whether passengers hearing this kind of news say, no, I’m going to go slow here. I’m not going to fly. Are you worried about that?

BEER: Well, obviously that would be a concern if it were to be the case, but as I say, we have seen no evidence of that. And so we are very much continuing to go about our business, executing on our business plan.

CAVUTO: All right. Now that business plan has to deal with vagaries like oil prices that got out of whack. How did you handle that, how are you handling it now?

BEER: Well, certainly oil prices have been the primary cost headwind this year. Clearly we think that it will add over half a billion dollars to our costs. So very much pushing us backwards somewhat in terms of the very significant cost progress that we had made to date. Like.

CAVUTO: Mr. Beer, this comes at a time when people are wondering about the stability of the airline industry going forward. Are you worried?

BEER: Well, certainly the industry has had to absorb all manner of shocks in the last three or four years. And so that has created great challenges for us here at American. We are pleased by the strides that we have made. In terms of restructuring our company, we have developed a plan that is well understood by our employees and we are making great progress along the path of implementing it. So, yes, we have clearly got challenges ahead, but we are very encouraged by the progress that we have been able to make these past 18 months or so at American.

CAVUTO: Do you worry that we are going to have people waiting on pretty long lines this summer?

BEER: Well, certainly travel bookings are looking solid for the summer. And so that will clearly make airports somewhat more congested. But an awful lot of effort has gone into planning for this. So all of our airport people are very much geared up for the additional volumes. And we feel as though the experience for our customers will be a very manageable one.

CAVUTO: All right, James Beer, chief financial officer, American Airlines in Ft. Worth, Texas. Sir, appreciate it.

BEER: Thanks.

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