The parent of American Airlines on Wednesday reshuffled its executive ranks as it announced a second-quarter loss that leaves its recovery trailing U.S. rivals.

The second-largest U.S. carrier also accelerated its aircraft renewal plan to combat the rising fuel prices that left it nursing a $10.7 million loss in the quarter.

The executive moves see chief financial officer Tom Horton promoted to president, solidifying his credentials as a potential successor to chairman and CEO Gerard Arpey. The company has not signaled any succession plan.

A perceived lack of clarity in Arpey's long-term strategy has seen him come under fire from labor groups and some analysts, despite keeping the airline out of bankruptcy, cutting costs and refocusing its domestic and international networks.

American is expected to be the only major U.S. carrier to report a loss in the crucial second quarter, with some rivals having already reported their best earnings in a decade.

Parent AMR Corp. (AMR) reported a $10.7 million loss for the June quarter compared to a year-ago deficit of $390 million. The per-share loss of 3 cents improved on the $1.39 loss a year earlier.

Sales rose 16% to $5.67 billion in the quarter, with passenger unit revenue up 16.7%, lagging rivals such as the United Airlines unit of UAL Corp. (UAUA).

Arpey maintains American has a cost disadvantage to rivals because of its labor agreements, but efforts to strike new deals with employees have so far failed.

The company has cut debt and raised substantial funds that have allowed it to replace aircraft with more fuel-efficient models.

American announced an order for another 35 Boeing Co. (BA) 737-800 aircraft for delivery in 2011 and 2012. This adds to the 84 new planes that started arriving in April last year.

Arpey, a self-confessed hawk on capacity growth, plans to limit American's rise in flying to 0.9% this year, including a 2.4% rise in international services.

The management reshuffle reflects an expected push in overseas business after finally securing approval from regulators to expand its ties with British Airways PLC (BAIRY, BAY.LN) and other members of the Oneworld airline alliance. It hopes to secure backing to seal similar ties with partner Japan Airlines Inc. as early as next month.

Horton is replaced as CFO by Bella Goren, who started at the airline as a financial analyst in 1986 and was most recently a senior marketing executive. Arpey also plans to appoint a new executive to oversee international operations.

AMR shares were recently up 0.9% at $6.91. The company is holding an analyst call at 2 p.m EDT.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com
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