Bankrupt American Airlines announces 13,000 job cuts

Arab Herald Thursday 2nd February, 2012

WASHINGTON - The parent company of bankrupt American Airlines has said it would slash 13,000 jobs around 15 per cent of its workforce - as part of a cost-cutting strategy necessary to compete with rivals.

AMR, which filed for bankruptcy protection in November, said Wednesday the lay off would reduce spending by $2 billion and raise revenue by $1 billion a year.

"As you know, our major competitors have used the restructuring process to overhaul their companies and become more competitive in every aspect of their business," AMR chief executive Tom Horton said in a letter to employees.

"All work groups will have total costs reduced by 20 per cent, including management," Horton said.

"While the savings from each work group will be achieved somewhat differently, each will experience the same percentage of reduction."

The biggest cuts - about 4,600 - are expected to be among maintenance workers. Baggage handlers could be cut by 4,200, while some 2,300 flight attendants, 1,400 management employees and 400 pilots would also lose their jobs.

AMR said it suffers from higher labor costs than its peers and would also be making changes to its staff pensions.

The 88,000 strong workforce of the AMR is mostly represented by three main unions, which are opposed to the changes. The negotiations with the three unions will begin shortly, said the company.

AMR lost $884 million in the first nine months of 2011. On Tuesday it disclosed a $904 million loss for December alone.

The company has lost more than $11 billion since 2001.