American Airlines to cut spending and workforce

Feb. 1, 2012 at 3:58 PM
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FORT WORTH, Texas, Feb. 1 (UPI) -- AMR Chief Executive Officer Tom Horton said Wednesday that U.S. carrier American Airlines is aiming for 20 percent in cost reductions across the board.

In a memo addressed employees, Horton said, "all work groups will have total costs reduced by 20 percent, including management."

The memo did not specify how many job cuts that would entail, but The Wall Street Journal said the airline planned to cut 13,000 positions. "While the savings from each work group will be achieved somewhat differently, each will experience the same percentage reduction," Horton wrote.

The airline has targeted a savings of $2 billion in operational costs in a plan that includes an investment of "about $2 billion per year in aircraft, so that by 2017 American's mainline jet fleet will be the youngest in North America."

The plan also includes $1 billion per year in "revenue improvements ... through network scale, fleet optimization and product improvements."

AMR, the parent company of American Airlines, filed for bankruptcy protection in November 2011.

The changes, Horton said, are "a necessity, not a choice."

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