American Air to slash work force

AMR Corp.’s American Airlines, the world’s largest carrier, last week said it will cut “thousands” of jobs as it slashes U.S. capacity and retires as many as 85 jets to blunt surging fuel prices and slowing demand.
The carrier last week said it would also add a $15 fee to check one bag, the first in the U.S. with such a charge.
Cutting domestic seating by 12 percent “is the right and necessary thing for American to do with oil at $130,” said Doug Runte, managing director at RBS Greenwich Capital in Greenwich, Conn. The move will help American boost fares, he added.
American’s retrenchment went beyond steps taken by its peers, and comes as analysts predict possible bankruptcies among the biggest airlines amid an 84 percent jump in jet fuel in the past year. CEO Gerard Arpey said the job losses would be in the “thousands,” without giving a figure.
AMR had 85,500 employees including those at American and regional unit American Eagle at year’s end. Workforce reductions will be “commensurate” with the drop in seating capacity, Arpey told reporters last week after AMR’s annual shareholders meeting in Fort Worth, Texas, where the company is based.
Arpey didn’t give details on what flights or routes might be affected by the domestic capacity cuts, which are more than twice what American had announced in April. The reductions are the airline’s third this year.
The new baggage fee will take effect June 15, as the U.S. summer travel season gets under way. It excludes some members of American’s frequent-flier program, travelers buying full-fare tickets and international passengers.
International capacity growth will slow and possibly decline in the fourth quarter, when the rest of the reductions are in place, American said.
As many as 45 planes will be dropped from American’s fleet, most of them aging Boeing Co. MD-80s, and as many as 40 regional jets at Eagle, where fourth-quarter capacity will fall as much as 11 percent, the company said. &#8226