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Jun 26, 2008 1:06 pm US/Central
American Expects To Cut Management Jobs By 8%
Compiled from staff reports and AP material
FORT WORTH (CBS 11 NEWS / AP) ―
American Airlines officials have told employees that the carrier expects to cut about 8 percent of management and support jobs at the nation's biggest airline as it copes with record high jet fuel prices.
The cuts will apply to "all levels of management" and probably be based on how critical the person's job is, Faye Wright, the managing director of flight services, told employees in an e-mail obtained by CBS 11 News. (Read the
full letter here.)
In a letter this week to employees,
Jeff Brundage, the airline's senior vice president of human resources, said reductions would vary by department but hew to the 8 percent range. He said the job cuts would be completed in September.
Brundage said the cuts are "difficult, but necessary changes in light of the challenges we face with overcapacity in the industry, skyrocketing fuel and a worsening U.S. economy."
The airline has not disclosed the number of pilots, flight attendants and mechanics who will lose their jobs.
American has about 82,000 employees, although it wasn't immediately clear how many are considered to hold management or support jobs.
Executives announced last month that American would cut capacity in the October-to-December quarter by 11 percent to 12 percent compared with late 2007. Sister carrier American Eagle would also reduce capacity.
Gerard Arpey, the chairman and chief executive of American and parent
AMR Corp. (
click for financial info), said at the time that the reductions would probably lead to thousands of jobs being eliminated, but the Fort Worth-based airline hasn't put out specific numbers.
The airline has said it would try to use voluntary measures such as severance agreements, to reduce the need for layoffs.
Continental Airlines Inc. recently offered voluntary-departure packages to employees with at least 10 years of service. Continental didn't offer cash, but instead promised one year of company-paid health insurance and free travel for employees and their families until 2023.
Continental's pilots struck a separate deal allowing for voluntary leaves of absence that would allow pilots to keep getting benefits while they would no longer be flying.
Airlines are struggling to handle fuel prices that have nearly doubled in the past year. AMR expects to spend more than $10 billion on jet fuel this year, up sharply from $6.7 billion last year.
American announced Wednesday that it will eliminate some flights at many airports, including hubs at Dallas-Fort Worth International Airport and Chicago's O'Hare Airport. American plans to quit operations in three cities, and American Eagle plans to pull out of five cities in September.
Although the airline is making heavy cuts throughout its operation, AMR's top executives are still earning a lot of money. And in 2007, the company's top five executives each got a raise. In fact,
Thomas Horton, AMR's Executive Vice President and Chief Financial Officer, got a $200,000 raise from the year before, according to documents the company filed with the Securities and Exchange Commission.
CBS 11 News Investigator
Bennett Cunningham examined those documents and made a chart showing just how much each of those top five executives earned in 2007 and the amount of their raises from the year before. Each man earned more than $2,000,000 from AMR in 2007.
Click here to download Bennett's chart in PDF format. All data from
sec.gov.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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