American Airlines to cut jobs, work remaining force harder

Update: 3:33PM EST: American expects to lay off “400 pilots, 2,300 flight attendants, 1,400 management and support staff positions and 8,800 ground workers and mechanics.” source

American Airlines parent company AMR is expected to lay out the company’s plan for moving forward from bankruptcy today and the news is not good. American Airlines may cut between 10,000 and 15,000 jobs across the company, outsourcing aircraft maintenance in a bid to keep flying.

“The surprise is going to be big and it’s going to be bloody and it’s going to be nasty,” Vicki Bryan, a bond analyst at Gimme Credit LLC in New York, told Business Week adding 10,000 jobs “is not unreasonable.” The airline will have to cut as much as $2 billion to gain competitive labor costs, more than the $800 million AMR estimated, she said.

Reporting a $904 million loss in December, American employs about 74,000 full- and part-time workers plus 14,000 at regional carrier American Eagle.

In December, Gadling noted the bankruptcy made American “among the last of the legacy carriers to finally concede to ultra-competitive pricing and sky high oil prices. It’s a sad day for stockholders, but like many of the fallen giants they’ll pick themselves up, dust off and continue to operate — albeit a little bit leaner.”

In addition to job cuts, American probably will want employees to work more hours and pay more for healthcare, while compensation stays the same or increases slightly,William Swelbar, an aviation research engineer at the Massachusetts Institute of Technology told Business Week.
“It’s clear we have to be a more nimble, flexible and efficient airline in order to compete successfully and be consistently profitable,” said Bruce Hicks, an AMR spokesman. “Before discussing publicly any of our proposed changes, we will first meet with the leaders of the unions.”

Union representatives have called a 4 p.m. news conference to discuss AMR’s plans.


Bankruptcy for American Airlines

[flickr image via ellenm1]