American Airlines to Cut 13,000 Jobs, Aims for $2 Billion in Cost Savings

By Paul Riegler on 1 February 2012
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American Airlines’ parent company AMR announced its turnaround plan in a memo from CEO Tom Horton to all employees.

The nation’s third-largest airline by traffic, American wants to cut 13,000 jobs, terminate its obligations for employee pensions, and boost revenue by $1 billion per year.  In addition, the plan calls for $2 billion in annualized cost savings by 2017.  The $1 billion in additional revenue would come from workforce cuts, grounding planes, restructuring debt and aircraft leases, and renegotiating supplier contracts.

American’s parent company AMR filed for Chapter 11 bankruptcy court protection on November 29. It was at that point the only major airline to have avoided filing for bankruptcy.  The company hopes to win the support of its main unions and it plans to avoid terminating existing labor contracts while in bankruptcy.

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