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American Airlines will lay off thousands of employees, slash flights, park up to 85 airplanes and begin charging new fees as it struggles to cope with crushing fuel prices.
Fort Worth-based American, which is the largest employer in North Texas, said Wednesday it will begin charging $15 each way for the first bag checked by passengers. Domestic capacity will be cut up to 12 percent later this year, and facilties nationwide could be consolidated or closed. Airline executives would not rule out the closure of a maintenance base, such as the airline's facility at Alliance Airport in Fort Worth.Airline officials would not specify how many jobs will be lost, but said the cuts will be across the board, including management and supervisor positions. Gerard Arpey, American's chief executive, said the cuts will likely be "in the thousands."The spike in oil prices, which topped $130 per barrel this week, is a "fundamental game changer" for the airline industry, Arpey said during the annual shareholders meeting of AMR Corp., American's parent company."This industry cannot continue under its current structure," he said. "It's not built for $125 or $130 oil."American has also increased fees for a broad slate of services, ranging from travelers flying with pets to oversized baggage fees. The increases range from $5 to $50 per service.The new baggage fee is is effective for tickets purchased on or after June 15. It does not apply to travelers with elite status in the airline's frequent flyer program, those flying on full-fare tickets, and on international flights.Union leaders said they were disturbed by the changes."We are concerned that our airline is abandoning its commitment to air passengers and its employees while cutting service to the bone," said Laura Glading, president of the Association of Professional Flight Attendants. "It seems that management is willing to cut everything except its salaries."Karl Schricker, an American pilot and spokesman for the Allied Pilots Association, said the cuts and fees signaled a failure of airline management."They can't count on customer service to fill the seats, they can't count on operational reliability to fill the seats, so they think the answer is to shrink the airline," he said. He added that "customers don't expect to be nickle-and-dimed on American Airlines."American said it planned to make the domestic flight reductions in the fourth quarter. It also said it would retire between 75 and 85 mainline and regional aircraft, including small jets and turboprops operated by American Eagle.American had said in April that it expected mainline seat capacity to decline 4.6 percent in the fourth quarter, compared to the same period in 2007.Airline officials also said they expects American Eagle's capacity to decline 10-11 percent in the fourth quarter. Previously, the airline had projected a 2 percent increase in fourth quarter capacity at Eagle.“The capacity reductions aim to significantly reduce costs as well as create a more sustainable supply-and-demand balance in the market,” Arpey said.
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