AT&T Names Sabre CEO Hannigan As President

NEW YORK (AP) -- AT&T Corp. veteran Betsy Bernard resigned as president and will be replaced by William J. Hannigan, the chairman and chief executive of Sabre Holdings Corp. and a long-time former colleague of AT&T chairman and CEO David Dorman.

The surprise announcement Tuesday comes as AT&T and its rivals contend with shrinking revenues due to price wars and competition with alternate forms of communication including cell phones, E-mail, and Internet-based calling.

Dorman told The Associated Press that Bernard's decision was driven by her desire to run a company, a goal she once expected to fulfill as part of a now-aborted plan to create a separate tracking stock for AT&T's consumer long-distance business.

With Dorman relatively new to his job and just shy of 50 years old, it was unlikely that Bernard, 48, would succeed him any time soon. When the tracking stock plan was scuttled and Bernard was named president about a year ago, "She never gave up the idea that she wanted to run a company," Dorman said in an interview.

"Things like this are not as sudden as they might seem ... My desire to have a definitive commitment precipitated our discussion (about Bernard's future) four or five months ago," said Dorman. "If she had a desire to run a company, it wasn't going to be at AT&T in the short run."

Bernard was quoted in AT&T's announcement that, "I look forward to finding the right leadership opportunity in the next phase of my career."

She had worked for AT&T for 18 years before leaving the company in 1995, and returned to AT&T in March 2001 as head of the company's shrinking consumer long-distance business.

The consumer telephone operation, once a $24 billion business with 60 million customers, now has annual revenues of less than $10 billion and about 35 million customers.

"We have no reason to believe that the departure is performance-related, other than the fact that managing a business with declining revenues and undergoing consequent downsizing is presumably not as enjoyable as some other alternatives," Merrill Lynch analyst Adam Quinton said in a research update.

Dorman worked with Hannigan for 12 years at Sprint and its predecessor companies, and later for about 18 months at Pacific Bell and that company's acquirer, SBC Communications Inc.

"I competed against AT&T at Sprint and SBC, and I've always held AT&T in high regard. AT&T is a gold standard," Hannigan said in an interview, rejecting the industry's worsening prognosis as a lost cause. "I think about the strength of our balance sheet, our customer base, the best brand in industry ... AT&T has the best cost structure in the industry."

Hannigan, 44, has spent nearly four years at the helm of Sabre, the airlines reservation system spun off by American Airlines in 1996 and owner of Travelocity and other travel Web sites. He joined Sabre in 1999 as president. Prior to that, Hannigan worked at SBC as president of SBC Global Markets and president of Southwestern Bell's business services unit.

Sabre named Sam Gilliland president and chief executive and Paul C. Ely Jr. as non-executive chairman to replace Hannigan. Gilliland has been the chief executive of Travelocity. Ely has served as an independent director of Sabre Holdings since January 1997.