February 3, 2012- AMR Corp, the parent company of American Airlines, says it wants to cut up to 13,000 jobs or about 15% of its entire workforce. The third largest airline in the nation is trying to reorganize while in bankruptcy.
The company also wants to end its pension plan, which is being opposed vehemently by the U.S. pension agency and the unions that represent workers in the company. It also wants to stop paying for retiree health benefits.
On Wednesday, AMR said it needed to cut 20% from its labor costs and will begin negotiation with its three unions. However, the flight attendants’ union president quickly rejected the idea as unacceptable and too harsh.
Thomas Horton, AMR’s CEO said the company aims to return to making a profit by cutting over $2 billion in spending each year and increasing revenue annually by $1 billion.
In the first three quarters of 2011, AMR lost over $884 million. In just December of 2011, the company lost $904 million. Since 2001, the company has accumulated losses totally $11 billion.
For weeks, the 88,000 employees of AMR have been bracing for unpleasant news. In November of last year, AMR, American and American Eagle, its affiliate for short-haul flights, all filed bankruptcy. Horton announced shortly after the filing that the company would come out of bankruptcy protection with less workers.