American Airlines’ parent company has unveiled restructuring plans to slash around 13,000 jobs globally – 15 per cent of its workforce.
The group is aiming to save £1.25 billion (US $2 billion) a year by reducing staff costs as part of restructuring plans while it is operating under Chapter 11 protection.
AMR chief executive Tom Horton told staff that, having analysed competitor airlines, a financial improvement of more than £1.9 billion (US $3 billion) was required for the airline to be successful.
This, in turn, would required employee related cost savings of more than US $1.25 billion a year.
As part of planned improvements to the group’s cost and capital structure, AMR – which includes American Airlines, American Eagle and American Connection brands – will also invest in newer, more economical aircraft.
Horton explained: “We plan to renew and optimise our fleet by investing an average of about US $2 billion per year in aircraft so that by 2017, American’s mainline jet fleet will be the youngest in North America, with the versatility to match aircraft size to the markets we serve.
“This step is central to our transformation and means more profitable flying due to markedly improved fuel and maintenance costs and higher revenue generation.”
Horton said the company will also increase alliances with airline partners and extend the scale of its route network.
He added: “We plan to build the scale of our network by increasing departures across American’s five key markets – Dallas/Fort Worth, Chicago, Miami, Los Angeles and New York – by 20 per cent over the next five years, capitalising on our loyal customer base and world class alliance partners.”
AMR Corporation filed for Chapter 11 bankruptcy protection in the US in November 2011.