The parent company of American Airlines has proposed eliminating 13,000 jobs – 15 per cent of its workforce – as part of its efforts to emerge from bankruptcy protection. It is unclear at this time what that means for the airlines’ local employees and air service to the Cayman Islands.
The Associated Press reports that the company has also proposed ending its traditional pension plans and to stop paying for retiree health benefits.
American Airlines spokesman Tim Smith said Wednesday’s announcement is simply an initial proposal from the company, which has to negotiate with its union groups, and that it is impossible to know the impact the restructuring will have on Cayman or other specific offices.
“[T]here is no way of knowing what the layoff count at any specific airport might be, if any. Yesterday’s high level and total estimates of layoffs are from our American Airlines initial proposal. And it is just our proposal at this stage. Under bankruptcy law, we must now begin negotiations with all our union groups in an effort to reach a consensual agreement. And whether that happens or not, the bankruptcy court has the final say,” said Mr. Smith, who works in the company’s headquarters in Fort Worth, Texas.
“This means we do not yet know what the final contracts will look like, so there is no way to discuss or know specifics about a location such as yours, or others,” he said.
According to AP, parent company AMR Corp. said it must cut labour costs by 20 per cent. CEO Thomas W. Horton said the company intends to cut spending by more than $2 billion per year and increase revenue by $1 billion per year. AMR has lost more than $11 billion since 2001.
Mr. Horton said American Airlines plans to increase flights from hubs such as New York, Los Angeles, Chicago, Dallas and Miami by 20 percent over the next five years, and also to increase international flying.
While the airline has recently dropped some routes (for example Halifax, Canada-New York, and Chicago-Delhi, India), Mr. Smith said no recent changes were solely due to restructuring, and were either announced prior to the company’s bankruptcy filing 29 November or were related to more routine season schedule changes already in the works.
“We have made no specific route changes anywhere that are purely related to our restructuring,” he said.
“In all such cases, they were routes that were not performing financially up to expectations,” he added.
According to AP, the 13,000 job cuts would include 4,600 maintenance workers, 4,200 baggage handlers, 2,300 flight attendants, 1,400 management and support employees, and 400 pilots.
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