Newspaper article THE JOURNAL RECORD

American Airlines to Cut More Jets, More Employees

Newspaper article THE JOURNAL RECORD

American Airlines to Cut More Jets, More Employees

Article excerpt

Associated Press

NEW YORK _ After grounding dozens of jets over the past year to help cut costs, American Airlines on Friday disclosed plans to shrink its fleet by at least 18 more planes and eliminate about 3,600 jobs.

The news came a day after the big U.S. airline disclosed another cost-saving strategy, saying it would hire other companies to handle many of the passenger-service jobs at 30 airports where American has a small presence.

Robert L. Crandall, chairman of American's parent AMR Corp., announced the latest cutbacks in a briefing with Wall Street securities analysts in New York.

He said even more jets would be grounded and more employees terminated unless there is a breakthrough in talks with pilot union leaders for concessions.

The company, based at the Dallas-Fort Worth airport, is trying to cut annual costs by $1 billion. Three-quarters of the savings are supposed to come from labor costs. The company is seeking $300 million of the savings from pilots.

"Unfortunately, we have made negligible progress with the (Allied Pilots Association) to date, and absent a commitment to lower costs, we are continuing to shrink," Crandall said.

Afterwards, AMR Executive Vice President Donald Carty said that the airline would take a couple hundred employees off the payroll for each retired jet that isn't replaced.

Carty wasn't specific on the number of job losses, but didn't dispute 3,600 jobs as a fair estimate. Company executives haven't made any decisions on what cities might be directly affected by the job losses.

Crandall said that if the airline gets the productivity improvements he thinks it needs, the airline would be able to start adding flights.

The jets to be removed from the airline's fleet are mostly Boeing 727s that fly short- to medium-range domestic routes. The airline is also taking three long-range DC-10 jets out of service.

In all, the company is retiring 28 jets and taking delivery of 10 new airplanes, for a net reduction of 18. …

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