AMR to Trim 13K Jobs in Plan for $2B in Cuts

AMR to Trim 13K Jobs in Plan for $2B in Cuts

AMR Corp. (AMR)’s American Airlines said it will eliminate 13,000 jobs under a plan to cut operating costs by $2 billion and boost revenue by $1 billion a year as the company restructures in bankruptcy.

All work groups, including management, will see a 20 percent reduction in costs and the company plans to terminate its four pension plans, Chief Executive Officer Tom Horton told labor leaders in a meeting today. The job cuts would be about 18 percent of American’s 73,800 employees.

Horton’s message offered the first indication of what a restructured American might look like. The carrier struggled through four straight annual losses and was battered by industry mergers that pitted it against larger competitors before filing for bankruptcy protection on Nov. 29.

“There is no avoiding the fact that the cost reductions will be deep,” Horton said. “And there is no sugarcoating the effect on our people.”

Labor savings will make up $1.25 billion of American’s target for spending reductions, Horton said. Proposed contract changes are being given to union employees at Fort Worth, Texas- based American later today.

Job cuts at American include 4,600 mechanics and maintenance workers, 4,200 baggage handlers and other airport ramp workers, 2,300 flight attendants, 400 pilots and 1,400 management and support staff, the company said.

The carrier will boost revenue by increasing departures at its hub airports by 20 percent over the next five years, by better matching aircraft size to specific routes and improving its products. Specifics weren’t immediately provided.

source: bloomberg.com