AMR filed for bankruptcy court protection on Nov. 29, following massive losses and unable to reach new labor deals with its unions. It became the last of the major legacy airlines to seek to reduce its costs in bankruptcy. BY
BY ANDREA AHLES | MCCLATCHY NEWSPAPERS
FORT WORTH, Texas — American Airlines parent AMR Corp. plans to cut 13,000 workers across the country as part of a broad bankruptcy restructuring that aims to cut costs by $2 billion a year, the company said Wednesday.
The proposed cuts include laying off 400 pilots, 4,600 mechanics & related workers, 4,200 fleet services employees, 2,300 flight attendants, and 1,400 management and support staff, said company spokesman Bruce Hicks.
The Fort Worth-based carrier also said it wants to terminate all four of its pension plans as part of a broad bankruptcy restructuring that aims to cut costs by $2 billion a year.
“American’s pension plans are very expensive — we spend more on them than our competitors spend on their retirement plans. We simply do not see a way we can secure the company’s future without terminating our defined benefit plans,” the company said in materials posted on a company website.
American is also proposing to replace its existing retirement benefit plans with defined contribution plans, such as 401(k)s. American said all active employees would be offered a 401(k) plan with nonpilot employees receiving a company match dollar-for-dollar of up to 5.5 percent. Pilots would participate in a new plan that will replace its defined benefit plan.
In a letter to employees, AMR Chairman and CEO Tom Horton said the company aims to improve its finances by $3 billion a year, with $1 billion coming in revenue improvements and $2 billion in reduced costs, including restructuring debt and leases, grounding older planes and “necessary employee-related changes.”
The company aims to reduce employee-related costs by more than $1.25 billion, Horton said, saying that all work groups, including management, would need to reduce costs by 20 percent.
AMR has more than 80,000 employees.
Regarding its operations, Horton said the company aims to increase departures from its five major markets — Dallas/Fort Worth, Chicago, Miami, New York and Los Angeles — by 20 percent in the next five years.
Horton stressed that major changes are necessary for American to compete with competitors and remain an independent airline. Noting that other parties would like to shrink the airline, close hubs or acquire the company and break it up, “I do not believe any of these outcomes are in the best interest of American, our people or our stakeholders,” he said.
AMR filed for bankruptcy court protection on Nov. 29, following massive losses and unable to reach new labor deals with its unions. It became the last of the major legacy airlines to seek to reduce its costs in bankruptcy.
