Categorized | Airlines

American Airlines to cut 1,600 jobs…

Posted on 13 June 2009

American Airlines says it plans to cut about 1,600 jobs, news that followed the company’s comments yesterday that it would make deeper capacity cuts than previously announced. The job cuts, which represent about 2% of AA’s workforce, came in a memo to workers Thursday afternoon from AA senior vice president Jeff Brundage, The Associated Press reports. In the memo, Brundage says: “These are trying times in the airline industry and our economy. The recession has taken a disproportionate toll on airlines and there is no easy way to announce yet more bad news.”

The carrier’s flight attendants will feel the brunt of the layoffs, accounting for about 1,200 of the 1,600 layoffs, according to The Dallas Morning News. Attendants based at New York LaGuardia and Chicago will bear the brunt of the cuts, according to the Morning News’ Airline Biz Blog, which runs a city-by-city breakdown of the cuts. Aside from the attendants, the remainder of the 1,600 job cuts will include about 300 jobs in “airport services,” about 50 cargo positions and about 40 positions at AA’s Kansas City maintenance facility, the Morning News reports.

But Thursday’s gloomy news was not isolated to AA, the nation’s No. 2 carrier. Delta, the USA’s biggest airline operator, also said it would have to “reassess staffing needs” after it said its capacity cuts would also be deeper than first announced. Comments about possible additional capacity cuts also came yesterday from officials at Continental and US Airways, according to Reuters.

To that point, Bloomberg News writes “the cutbacks in flights and jobs announced yesterday may herald similar steps by other U.S. airlines. Revenue is vanishing as they trim fares to lure customers who are flying less because of the recession, especially in premium-class cabins on overseas routes.” Airline consultant Robert Mann of R.W. Man & Co. tells Bloomberg: “Unless there is a huge upturn in business travel propensity and spending, it’s inevitable there will be further cutbacks in capacity on the international side.”

Meanwhile, United – the nation’s No. 3 carrier – “is not predisposed” to make additional capacity cuts now, though it is monitoring demand and capacity on a daily basis, CEO Glenn Tilton is quoted as saying by Bloomberg. Still, with both demand and fares low, the status quo can’t last much longer, says consultant Mann. “You can clearly fill up the airplane with cheap fares, but that doesn’t get you the economics you want. The maximum revenue is just less than you’d hoped. It doesn’t necessarily get you to a positive bottom line.”

Source: USA Today

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