American Airlines to Cut 7,000 Jobs

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Last updated at: (Beijing Time) Wednesday, August 14, 2002

American Airlines to Cut 7,000 Jobs

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In one of the most dramatic reorganizations within the financially troubled airline industry, American Airlines Tuesday said it plans to reduce its operations by 9 percent next month and eliminate 7,000 jobs.

The move is expected to save the airline about $1.1 billion a year said Jeffrey Campbell, American's chief financial officer. American also plans to retire aircraft and eliminate the first-class section on many of the Boeing 767-300 jets that it flies to Europe, Latin America and Hawaii.

The world's largest airline said the move was to counter the more than $1 billion the airline has lost during the first six months of the year. That was more than any annual loss in the airline's history, except for the loss of $1.8 billion in 2001, much of which was attributed to the Sept. 11 terrorist attacks.

At Dallas/Fort Worth International Airport, where American is based, the airline plans to spread its arriving and departing flights more evenly throughout the day as opposed to concentrated banks in the morning, afternoon and evening. The move will allow the airline to use fewer employees and better utilize its gates. It will also mean longer connecting times for fliers.

American will retire 74 costly Fokker 100 aircraft and defer 35 aircraft deliveries in 2002. American will also accelerate the retirement of nine Boeing 767-300 planes it inherited from its purchase of Trans World Airlines and plans to defer or cancel new jet deliveries in the future.

American's move comes just two days after US Airways filed for bankruptcy protection. A bankruptcy court judge in Alexandria yesterday approved a $500 million financing plan for that airline so that it can continue its normal operations.

High labor costs, a slowing economy and last year's terrorist hijackings have caused massive losses in the airline industry, although US Airways, the nation's seventh-largest airline, is the first major airline to file for bankruptcy since the Sept. 11 attacks.

Source: Agencies

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