American Airlines to cut jobs, work remaining force harder

by Chris Owen on

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.



[flickr image via ellenm1]

First major signs of the United – Continental merger: 500 jobs lost in Houston

by Scott Carmichael on

We’ll file this piece of news under “quelle surprise” – now United Airlines and Continental Airlines are working hard to merge their companies, the first victims will be found at the Houston based headquarters of Continental.

Within the management and clerical ranks, 500 people will soon be without a job. The firings begin in April, and will continue through June 30. Workers will leave with a severance package and subsidized health care benefits.

Since both airlines are about the same size, it is a tricky task to figure out where the various departments will be headquartered, so this loss of jobs is most likely only the beginning.

The new airline does not expect any job losses in frontline staff positions such as pilots, gate agents or anyone that works at the airport.

There is some other good news too – despite the loss of 500 jobs, the Texas Workforce Commission expects a net gain in jobs once the merger is complete, as George Bush Intercontinental Airport will be one of the largest hubs for the new airline. Later this year, United Airlines expects to announce its first major round of job cuts.

[Photo: Getty Images]

Roll the dice with “job-loss guarantees”

by Tom Johansmeyer on

It makes a lot of sense right now. You have a job, and you’re feeling comfortable in it. You’ve survived the latest round of layoffs, and it looks like the bleeding has stopped for a while. Or, you’re just so stressed out you throw caution to the wind and book a vacation, just so you can recharge a bit.

But, you aren’t reckless.

Because we all live and work in a world at financial risk, you had the presence of mind to take advantage of a “job-loss guarantee.” If you lose your job, you get your money back … maybe. It turns out that guarantees aren’t always guaranteed. Several travel companies – including JetBlue and Norwegian Cruise Line – the rules are being tweaked.

Defining “job” can be the tough part. Several programs require that you be employed for at least a year at your current gig and that it be full-time. But, it varies. Check the terms and conditions before you bank on this benefit.

“Job loss” can be tricky, as well. If you were laid off, you seem to be in the best position to recoup what you’ve paid. But, if you were fired for cause, some programs may not pay. According to JetBlue, for example, “The spirit of the program is to accommodate those who have involuntarily lost their jobs due to the economy.” Resignations and buyout programs, also, may not qualify under some job-loss guarantee programs.

Be prepared to prove that you have lost your job. Chances are you’ll find something in the stack of paper that Human Resources gives you (usually your termination letter).

These programs can be helpful, but read the fine print. If you’re at all worried, spend your day off on your front stoop and hold onto your cash for a more stable time.

Delta offers buyouts to 75,000 employees

by Josh Lew on

Despite promises that job cuts will be minimal as a result of the Northwest/Delta merger, Delta recently offered buyouts to 75,000 employees. Delta CEO Richard Anderson explained that the airline needs to make the cuts because of the economy: “To deal with the effect of the recession, we are moving quickly and decisively to decrease system-wide capacity by 6 to 8%.” This could be bad news for Delta employees. Severance packages are offered in lieu of lay-offs, but if not enough workers opt for the buyouts…

Northwest and Delta have hinted that their merger will lead to an unspecified number of job cuts. The Delta buyouts might allow Northwest employees at hubs in Minneapolis and Detroit to rest a little easier. Delta is offering buyouts to its own employees instead of swooping in to Northwest hubs and giving their own workers the best jobs. The only thing that is certain is that the drama is far from over.

[Via Today in the Sky]