Bloomberg News

AMR Cuts 1,200 More Jobs in $1.25B Savings Plan

April 18, 2012

An American Airlines at Ronald Reagan National Airport in Arlington, Virginia. Photographer: Andrew Harrer/Bloomberg

An American Airlines at Ronald Reagan National Airport in Arlington, Virginia. Photographer: Andrew Harrer/Bloomberg

American Airlines will cut 1,200 airport agent, baggage and cargo jobs and close an Arizona reservations center under a bankruptcy restructuring plan to trim annual labor spending by $1.25 billion.

The reductions announced today mean all of the carrier’s airport jobs in seven U.S. and two Canadian cities will be outsourced. AMR Corp. (AAMRQ:US)’s American detailed changes for the nonunion group 11 weeks after telling other employees it would do away with 13,000 of their jobs, freeze pensions and make work-rule and benefit changes.

American, the third-biggest U.S. airline, will begin presenting testimony on April 23 to persuade a bankruptcy judge to let it void union contracts and impose new ones to secure the spending cuts. The request follows the Fort Worth, Texas-based company’s failure to negotiate agreements with any of its unions. Talks can continue during the court hearings.

“Not a single decision that affects a single employee was made lightly,” the carrier said in a letter signed by Craig Kreeger, senior vice president for customer experience; Virasb Vahidi, senior vice president for marketing and planning; and Jim Ream, senior vice president for operations.

American’s goal to cut annual expenses 20 percent for each work group translates to a $95 million reduction for the 10,000 airport and cargo agents. Most of the changes will occur during the next 60 to 120 days, the airline said.

Airports Affected

The company will outsource all jobs at airports with the fewest daily flights. Those facilities in the U.S. are in or near Hartford, Connecticut; Columbus, Ohio; Memphis, Tennessee; Ontario and Sacramento, California; Portland, Oregon; and Reno, Nevada. In Canada, they are in Calgary and Vancouver.

American will close Admirals Clubs at Dulles airport in Washington; Kansas City, Missouri; Panama City; and Santo Domingo, Dominican Republic.

About 680 agents at the closed reservations center in Tucson, Arizona, will be offered jobs at other offices or a chance to move to home-based work, the carrier said. Another 800 will be shifted to homes from offices, and some part-time positions will be eliminated. Base pay will be increased for some workers and reduced for others.

AMR filed for Chapter 11 bankruptcy on Nov. 29 as it headed for a fourth straight annual loss, becoming the final major full-service U.S. carrier to seek court protection. American said it was left at a labor-cost disadvantage after rivals used bankruptcy to change work rules and drop or reduce pensions and other costly benefits.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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