In as much as I am not sure if I like Carty or not, I give him credit for coming forward and outrightly admitting many negative aspects the industry facing. Other CEO's may be doing the same thing, but they seem to always be doing it indirectly somehow...in other words..beating around the bush. Walter DCA NEW YORK, June 11 (Reuters) - The U.S. airline industry is facing a crisis in demand following the Sept. 11 attacks that is unprecedented, and air carriers must now base their decisions on the fact that the sector has undergone a fundamental change, the chief executive of American Airlines parent AMR Corp. (AMR) said on Tuesday. "The danger to the industry is that we will fail to recognize not just the severity, but also the significance of the situation in front of us," AMR Chief Executive Donald J. Carty told analysts at the Merrill Lynch Global Transporation Conference on Tuesday. Carty, who also is AMR Corp.'s president and chairman, stressed the need to fundamentally examine every facet of No. 1 air carrier American Airlines' business to position the company for growth when the industry begins to recover. "As much as we'd like to, going back to the way things were is probably not an option," he said. "I believe that what we're up against in the airline business is much more than just a cyclical problem." Carty said expense-trimming initiatives at American had cut out about $900 million of structural costs, and said the company was trying to identify areas that would be targeted by a second round of cuts. Dallas/Ft. Worth-based American Airlines, which Carty said has been underperforming in terms of revenue, is trying to fine-tune its capacity in areas such as Latin America and Dallas/Ft. Worth. AMR is also working to simplify its business and cut down on costs through automation in airport terminals, reducing aircraft fuel burn rates, simplifying inflight food and beverage service, and trimming marketing costs. "Nothing that we do is sacred," Carty said. "We expect the cumulative effect of all our projects to be quite substantial." To make maintenance and repairs simpler, Carty said American has cut the number of major aircraft fleet types it operates down to 7 from 14, and plans to eventually trim its subfleets down from an already-reduced 20 to 15. He stressed that the industry's current system of pricing airfares is "badly broken," but said that while drastic measures need to be taken to improve pricing methods, "it's probably to early to tell what that something is, exactly." ©2002 Reuters Limited.