DALLAS (AP) -- For the second time in less than a year, American Airlines has moved to make itself a smaller but more efficient carrier that can survive the current turbulence in the airline industry.þþAmerican announced Tuesday that it would cut 7,000 jobs -- 6 percent of the work force -- retire 74 aircraft and cut about 9 percent of its scheduled service in order to reduce costs and compete better with low-fare carriers.þþAmerican, the world's largest airline, said cost-cutting steps will save $1.1 billion a year and help ensure its long-term survival.þþThe company has lost $2.8 billion since the beginning of last year. Airlines have struggled amid a sluggish economy and downturn in lucrative corporate travel, and their troubles were greatly compounded by the Sept. 11 terror attacks that scared travelers away.þþIn recent weeks, American chairman and chief executive Donald Carty had signaled that a restructuring was in the works, and employees said they were not surprised by the announcement.þþ``We've kind of been expecting it,'' said flight attendant Lisa Dahlgren as she reported for a Tokyo-bound flight Tuesday at Dallas-Fort Worth International Airport. ``It's just been a tough time for the company. We all understand that.''þþUnion officials said the job cuts will include 550 pilots, 2,550 flight attendants and the balance from mechanics, ramp workers, gate and reservations agents and other employees.þþSt. Louis figures to take the hardest hit -- losing 1,100 TWA pilot and flight attendant jobs in October, state and city officials said. An American official who spoke on condition of anonymity said the local toll could go much higher -- most of the 3,100 pilot and flight attendant jobs -- because TWA veterans were put at the bottom of union seniority lists after American bought TWA last year.þþSome layoffs could be averted if people take early retirement or share jobs, airline officials said. The layoffs will be completed by next March.þþAmerican said it would also reduce peak-hour flights at its Dallas-Fort Worth hub airport, spreading flights more evenly throughout the day, which could lead to longer layovers for passengers making connecting flights. It already does this in Chicago.þþThe airline will retire 74 Fokker 100s, which were costly to maintain, especially after the bankruptcy of the original manufacturer made spare parts hard to find, the airline said. American will also retire nine TWA jets ahead of schedule.þþAmerican was losing money last year even before the Sept. 11 attacks, in which two of its planes and two United jets were hijacked. When travel dropped sharply after the attacks, American announced 20,000 job cuts -- which translated into 13,000 layoffs -- and it reduced the size of its fleet.þþUnion officials, powerless to stop the layoffs, said the airline should focus on increasing revenue instead of cutting costs.þþSam Mayer, spokesman for the Allied Pilots Association, said flyers were disappointed that Carty has often criticized the industry's fare structure, ``but the first thing they do is go back to the old tried-and-true -- 'We're going to cut jobs and downsize.' You don't return to profitability by getting smaller.''þþAn American spokesman, Stephen Tankel, said however that the airline felt vindicated by the generally positive reaction to the announcement on Wall Street.þþMichael Linenberg, an analyst with Merrill Lynch, said he was satisfied with American's level of cost-cutting and was ``more encouraged that the company would be willing to go further in '03 should economic conditions remain sluggish.''þþRay Neidl, an analyst with Blaylock & Partners, said airlines need to find a way to increase revenue, but he added that American was ``being proactive, taking actions to reduce their cost structure.''þþAmerican's chief financial officer, Jeffrey Campbell, said retiring aircraft early and other measures will cause the airline to take charges against earnings of $300 million to $400 million in the current quarter. He said the carrier's balance sheet remains strong, with $2.6 billion in cash.þþ
Source: NY Times
