Breaking Travel News

American Airlines outlines job losses as restructuring takes shape

American Airlines outlines job losses as restructuring takes shape

American Airlines has outlined plans to cut 13,000 jobs as it seeks to raise an additional $3 billion per annum by 2017.

The plan, which targets $2 billion in cost savings and $1 billion in additional revenue per annum, is designed to allow American to reduce its debt and become financially viable in the years after its emergence from the restructuring process.

American Airlines - a wholly owned subsidiary of AMR Corporation - filed for bankruptcy protection in December last year.

A key element of the plan will see spending on personnel costs cut by 20 per cent, with the loss of approximately 13,000 employees.

These reductions, which are set to affect each level of the company’s hierarchy, will result in average annual employee-related savings of $1.25 billion from 2012 through 2017.

American will also outsource a portion of its aircraft maintenance work and certain airport fleet service clerk work.

This decision is likely to mean the closure of the Fort Worth Alliance Airport (AFW) maintenance base.

Thos staff which remain will also see American introduce new work rule designed to boost productivity.

Pension provision for employees will also be cut.

American Airlines chairman, Tom Horton, said: “The plan we are outlining today provides the framework for a new American Airlines, positioned to succeed in an intensely competitive industry that has been transformed by our competitors’ recent restructurings.

“Just as other airlines have done and will continue to do, we must invest restructuring-related cost savings in ongoing innovation and customer service improvements that drive revenue.”

The plan is also likely to see major changes to American’s route structure, network, capacity and fleet.

A central element of this is likely to be the overhaul of American’s fleet, enabling the carrier to better match the right equipment to the right routes.

American plans to invest about $2 billion per year in new aircraft, so that by 2017 its mainline jet fleet will be the youngest in America.

“These are painful decisions,” Horton continued, “but they are essential to American’s future.

“We will emerge from our restructuring process as a leaner organisation with fewer people, but we will also preserve tens of thousands of jobs that would have been lost if we had not embarked on this path – and that’s a goal worth fighting for.”