American Airlines to cut 13,000 jobs

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FORT WORTH, TEXAS — American Airlines on Wednesday announced that it will be cutting approximately 13,000 employees as part of their new five-year business plan, just months after its parent company filed for Chapter 11 bankruptcy. According to the airline company, which is owned by AMR Corporation, the business plan targets an annual financial improvement of more than $3 billion by 2017, including $2 billion in cost savings and $1 billion in revenue enhancements. “American Airlines is moving forward decisively,” said Tom Horton, Chairman and Chief Executive Officer of AMR Corp., adding that the plan provides the framework for a new American Airlines. “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 airlines that have failed to adapt to these changes are no longer in business. Change will be difficult, particularly as we will be ending this process with fewer people, but it is a necessity. American is ready to compete and win,” Horton added. In addition, the company said it intends to engage in appropriate negotiations with its economic stakeholders and union representatives and seek the necessary Bankruptcy Court approvals. Previous initiatives, including changes to its route structure, network, capacity and fleet, will allow American Airlines to carry out additional savings over the next six years by restructuring debt and leases, grounding older planes, improving supplier contracts, and undertaking other initiatives, the company said. Among the plan’s most important modifications is employee cost reduction by 20 percent, resulting in average annual employee-related savings of $1.25 billion from 2012 through 2017. “These are painful decisions,” Horton added, “but they are essential to American’s future. We will emerge from our restructuring process as a leaner organization 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.” AMR, which also owns American Eagle, had previously filed for Chapter 11 bankruptcy protection on November 29, 2011. “This was a difficult decision, but it is the necessary and right path for us to take – and take now – to become a more efficient, financially stronger, and competitive airline,” Horton said at the time.

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