Big Slick
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- Oct 18, 2004
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Big Job Cuts Announced at American
American Airlines expects to cut nearly 7,000 employees by the end of the year, or about 8 percent of its worldwide work force, as it reduces flights and grounds aircraft because of high fuel costs, the airline told employees Wednesday.
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American said in a regulatory filing that it expected to record a second-quarter charge of as much as $1.3 billion to account for the job reductions and to write down the value of the MD-80 and Embraer 135 regional jets that it is retiring as it eliminates flights.
The job cuts, which appear to be twice as big as those announced so far by any other carrier, could affect as many as 900 flight attendants.
In a message posted on its Web site, the Association of Professional Flight Attendants said Wednesday that it had received notice from American of its intent to lay off union members with the least seniority. The exact number will depend on how many older workers agree to take voluntary retirement packages, the airline told the union.
In an e-mail memorandum to employees, Jeffrey J. Brundage, American’s senior vice president for human resources, said the airline expected its job reductions to mirror the 8 percent cut in worldwide flights it plans by the end of the year.
American, the largest domestic carrier and a division of the AMR Corporation, announced in May that it would cut flights by 11 percent to 12 percent in the United States, and by about 8 percent over all.
“While we are still working through the specific impact to employee work groups, both voluntary and involuntary, employee reductions commensurate with the overall system capacity reductions are expected companywide as we reduce the size of the airline,” Mr. Brundage said in the memorandum.
“It’s crucial that we take the appropriate actions to operate a strong and competitive airline for both our employees and customers,” he added.
American has about 85,500 employees, so an 8 percent cut would equal about 6,840 jobs. American has previously said that it plans to cut its management and support staff jobs by about 8 percent.
“These are difficult but necessary changes given the unprecedented challenges we face with overcapacity in the industry, skyrocketing fuel prices, and a worsening U.S. economy,” said Tim Wagner, an American spokesman.
American hopes many of its job reductions can be achieved through voluntary steps, Mr. Wagner added. He said the airline did not have figures available for job cuts it plans in other areas.
The layoffs would be effective Aug. 31. American has about 18,000 flight attendants.
American is in the midst of contract negotiations with the flight attendants union and also is holding discussions with its pilots’ union.
Mr. Brundage said American had agreed on an early-retirement deal covering flight attendants and members of the Transport Workers Union, which represents mechanics and ground workers.
Airlines have been hit hard by a rise in the price of jet fuel, which is up more than 80 percent over 2007. They have raised fares, imposed surcharges and set new fees, like the $15 charge American began last month for many passengers to check a bag.
United Airlines said last month that it planned to eliminate 1,100 jobs, up from a previous estimate of 500 jobs. As part of the move, United said it planned to lay off 950 pilots, and is expected to announce further employee cuts.
Continental Airlines also announced plans to cut 3,000 jobs, although it has not been specific about which jobs will be eliminated.
Including the cuts disclosed Wednesday by American, airlines have said they plan to cut about 30,000 jobs this year.
If job cuts continue at that pace, 2008 will be the second-worst year this decade for job reductions in the airline industry, according to Challenger, Gray & Christmas, a firm that tracks employment data. Airlines laid off more than 100,000 workers in 2001 after the 9/11 attacks in New York and Washington.
Meanwhile, AirTran Airways told employees that it wanted to cut their pay by an average of 10 percent, in an effort to fight higher fuel costs.
Robert Fornaro, the chief executive at AirTran, said in an e-mail message to employees Wednesday that the airline hoped the cut would be temporary and last for six months. But “we may need to do more in the future,” Mr. Fornaro said.
The pay cut, which would range from 5 percent for some workers to 15 percent for executives, would affect all levels of employees. Mr. Fornaro said AirTran wants the cuts to begin Aug. 1, and was continuing to hold discussions with its unions.
American Airlines expects to cut nearly 7,000 employees by the end of the year, or about 8 percent of its worldwide work force, as it reduces flights and grounds aircraft because of high fuel costs, the airline told employees Wednesday.
Skip to next paragraph
American said in a regulatory filing that it expected to record a second-quarter charge of as much as $1.3 billion to account for the job reductions and to write down the value of the MD-80 and Embraer 135 regional jets that it is retiring as it eliminates flights.
The job cuts, which appear to be twice as big as those announced so far by any other carrier, could affect as many as 900 flight attendants.
In a message posted on its Web site, the Association of Professional Flight Attendants said Wednesday that it had received notice from American of its intent to lay off union members with the least seniority. The exact number will depend on how many older workers agree to take voluntary retirement packages, the airline told the union.
In an e-mail memorandum to employees, Jeffrey J. Brundage, American’s senior vice president for human resources, said the airline expected its job reductions to mirror the 8 percent cut in worldwide flights it plans by the end of the year.
American, the largest domestic carrier and a division of the AMR Corporation, announced in May that it would cut flights by 11 percent to 12 percent in the United States, and by about 8 percent over all.
“While we are still working through the specific impact to employee work groups, both voluntary and involuntary, employee reductions commensurate with the overall system capacity reductions are expected companywide as we reduce the size of the airline,” Mr. Brundage said in the memorandum.
“It’s crucial that we take the appropriate actions to operate a strong and competitive airline for both our employees and customers,” he added.
American has about 85,500 employees, so an 8 percent cut would equal about 6,840 jobs. American has previously said that it plans to cut its management and support staff jobs by about 8 percent.
“These are difficult but necessary changes given the unprecedented challenges we face with overcapacity in the industry, skyrocketing fuel prices, and a worsening U.S. economy,” said Tim Wagner, an American spokesman.
American hopes many of its job reductions can be achieved through voluntary steps, Mr. Wagner added. He said the airline did not have figures available for job cuts it plans in other areas.
The layoffs would be effective Aug. 31. American has about 18,000 flight attendants.
American is in the midst of contract negotiations with the flight attendants union and also is holding discussions with its pilots’ union.
Mr. Brundage said American had agreed on an early-retirement deal covering flight attendants and members of the Transport Workers Union, which represents mechanics and ground workers.
Airlines have been hit hard by a rise in the price of jet fuel, which is up more than 80 percent over 2007. They have raised fares, imposed surcharges and set new fees, like the $15 charge American began last month for many passengers to check a bag.
United Airlines said last month that it planned to eliminate 1,100 jobs, up from a previous estimate of 500 jobs. As part of the move, United said it planned to lay off 950 pilots, and is expected to announce further employee cuts.
Continental Airlines also announced plans to cut 3,000 jobs, although it has not been specific about which jobs will be eliminated.
Including the cuts disclosed Wednesday by American, airlines have said they plan to cut about 30,000 jobs this year.
If job cuts continue at that pace, 2008 will be the second-worst year this decade for job reductions in the airline industry, according to Challenger, Gray & Christmas, a firm that tracks employment data. Airlines laid off more than 100,000 workers in 2001 after the 9/11 attacks in New York and Washington.
Meanwhile, AirTran Airways told employees that it wanted to cut their pay by an average of 10 percent, in an effort to fight higher fuel costs.
Robert Fornaro, the chief executive at AirTran, said in an e-mail message to employees Wednesday that the airline hoped the cut would be temporary and last for six months. But “we may need to do more in the future,” Mr. Fornaro said.
The pay cut, which would range from 5 percent for some workers to 15 percent for executives, would affect all levels of employees. Mr. Fornaro said AirTran wants the cuts to begin Aug. 1, and was continuing to hold discussions with its unions.
