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American Airlines cutting 13,000 jobs as cost-saving measure

By Andrew Moran     Feb 1, 2012 in Business
New York - American Airlines has confirmed to its unions Wednesday that it is cutting 13,000 jobs from its workforce of 88,000. The No. 3 airline in the United States is conducting cost-saving measures to emerge from bankruptcy.
There have been numerous rumors over the past 24 hours as to what American Airlines plans to do. The New York Times reported earlier Wednesday that American Airlines was considering a 20 percent cut to salaries, while the Associated Press reported that the airline would eliminate 14,000 jobs.
In a letter to American Airlines employees, Thomas Horton, CEO of American Air parent AMR Corp., stated that the company plans to cut 13,000 jobs from its staff of about 88,000. A large number of cuts will come from the maintenance crews, which will amount to 4,600 jobs.
In total, the airline will cut 4,000 ground worker jobs, 2,300 flight attendants and 1,400 management employees. Pilots and first officers will only be reduced by approximately 400 – the lowest among all of the staff reductions.
Horton’s letter notes that American needs to save approximately $1.25 billion in annual labor costs and lower the cost of each working group by 20 percent. It does plan to offer its employees a profit-sharing proposition.
“I take full ownership of our business plan. It is very important, too, that we are all sure that the proposed changes are appropriate for each part of the company,” wrote Horton. “That's especially true because we will end this journey with many 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. As I've said before, our objective is to create the best outcome for the greatest possible number of people.”
Other cost-saving measures include reforming its leases and debt, advance its supplier contracts and grounding older airplanes. In total, the company wants to save $2 billion per year in cost cuts in addition to $1 billion in annual revenue by offering improved products to customers and utilizing its aircraft.
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