Latest News

American Airlines says it could cut 6,800 jobs this year

AMR Corp., the parent company of American Airlines and American Eagle, could eliminate up to 6,800 jobs this year as it downsizes its fall schedule, executives said.

The Fort Worth-based company also said in a filing with the Securities and Exchange Commission Wednesday that it would record a one-time non-cash charge of up to $1.2 billion during the second quarter to write down the cost of some airplanes, and take a $70 million charge on costs related to employee reductions.

The airline alerted union officials that up to 900 flight attendant jobs could be slashed at the end of August. Airline officials are still calculating the impact on pilots and ground workers. The company said last week that about 8 percent of management and support staff positions will also be cut.

The carrier, which is the largest employer in North Texas, is struggling with record fuel prices and a slowing economy. Fuel costs alone are expected to cost the airline billions in extra expenses this year.

“We regret these reductions are necessary,” said Jeff Brundage, the airline’s senior vice president of human resources, in a memo to employees. “It’s crucial that we take the appropriate actions to operate a strong and competitive airline for both our employees and customers.”

American will reduce its overall passenger capacity by about 8 percent in November, including Eagle flights, and will park more than 80 airplanes. Brundage said that employee reductions will match the capacity cuts, reducing jobs by about 8 percent.

That would mean eliminating about 6,800 positions out of the airline’s 85,000 full-time equivalents.

Not all of those would be layoffs. The airline is offering an early retirement package to flight attendants and ground workers, as well as options for voluntary leaves of absense that could reduce furloughs.

Flight attendants over age 50, who have at least 15 years of seniority, can opt for an early retirement plan that includes a $15,000 severance payment and some medical and travel benefits. The airline is also offering a program that would allow two attendants to share one job, sharing the flying time.

In its filing with the SEC, AMR said the non-cash charge would be between $1.1 billion and $1.2 billion. It will be needed to write down the value of its MD-80 narrowbody planes and its Embraer RJ-135 regional jets.

  Comments