In a move to allow it to continue to price its fares competitively and offer cheap airplane tickets and cheap vacation packages, American Airlines is planning to eliminate about 13,000 jobs, 15 percent of its workforce.
American is the countrys third largest airline and is operating under bankruptcy protection which it filed last November.
The airlines goal is to reduce its labor costs by 20 percent and will shortly commence negotiations with its three major unions.
American wants to return to profitability by decreasing spending by over $2 billion annually and by raising revenue annually by $1 billion.
American lost $884 million through September of last year and recently reported a $904 million loss for December. Since 2001 the airline has lost over $11 billion.
The airline is planning on using the bankruptcy restructuring process to make the necessary changes to meet its challenges head on and capitalize fully on the solid foundation it believes it has put in place.
The President of Americans flight attendants union responded saying I expect dismay and outrage from our membership as details of the proposal are made public.
After American fell far short (paying only $6.5 of the $100 million due) the last week of January in making a required contribution towards its pension plans the federal Pension Benefit Guaranty Corporation filed $91 million in liens against American Airlines property in an attempt to pressure the airline to save its retirement plans vs. forcing the government to take over its pension plans.
Americans four pension plans cover approximately 130,000 people. www.cheapfares.com