American Airlines is using their high-profile bankruptcy filing to benefit them by eliminating 13,000 jobs or 15% of its workforce. The ailing airline is doing everything it can to remake itself using the bankruptcy filing.
As part of the bankruptcy filing, AMR has proposed to end its traditional pension plans and stop paying retiree health benefits. This move has been met with strong opposition by the airline’s union and the US pension insurance agency.
American Airlines Corporation is doing everything it can to benefit from filing bankruptcy and intends to cut labor costs by 20%. In the near future, the company will begin negotiations with its three employee unions. The flight attendants union president has already rejected any ideas that AMR has proposed and believes they are unacceptably harsh.
Wednesday, Thomas W Horton said the company hopes to use filing bankruptcy to return to profitability by cutting spending more than $2 billion per year and hoping to raise revenues of $1 billion per year. In a statement, he said, “We are going to use the restructuring process to make the necessary changes to meet our challenges head on and capitalize fully on the solid foundation we put in place.”
Ever since AMR announced they were filing bankruptcy, there are 88,000 employees have been bracing for bad news. The company filed for bankruptcy protection in November and has stated when they emerge from bankruptcy, they intend to have fewer workers.
When asked about the bankruptcy, Laura Glading, president of the Association of professional flight attendants, stated the airline proposal was much more drastic than expected. She said, “this is an absolute outrage, there’s nothing in here that’s remotely acceptable.”
When it comes down to it, the employees jobs are in the hands of the bankruptcy court and how they rule on how American Airlines emerges from filing bankruptcy.