American Needs Cuts of $1 Billion, Its CEO Says

American Airlines needs to cut costs by more than $1 billion to keep its expenses in line with 2005 levels, the No. 1 U.S. airline’s chief executive said Wednesday.

American, a unit of AMR Corp., is “looking under every rock” for cost-cutting opportunities to offset record-high fuel prices, Gerard Arpey said on a webcast of a Bear Stearns Global Transportation Conference.

The airline currently has a plan to trim costs by $700 million a year through such measures as fuel conservation, lowering ticket distribution costs and direct airplane routing.