World number one American Airlines has announced plans to lay off as many as 1,100 pilots, mechanics and other ground staff in coming months, with more cuts in the future as it struggles to pare costs amid falling revenue.
"Unless things change significantly, we know we are in for a difficult winter," Jeff Brundage, American's senior vice president of human resources, said in a letter to employees Friday, outlining the first wave of cuts. Up to 450 pilots will be laid off by mid-2005, Brundage said.
Between 300 and 400 mechanics and other maintenance workers will be slashed at the airline's Kansas City, Missouri maintenance base, beginning in mid-November.
Between 200 and 250 jobs will be cut at American's maintenance operation in St. Louis, also stating in mid-November, he said.
Additional maintenance jobs will be cut throughout American's system - the final numbers have yet to be determined - and the carrier will also trim customer service, management and support staff. The only employee group left untouched was flight attendants, though the carrier was due to reduce their number through voluntary departures starting in January.
Stock in AMR Corp, American's parent, dropped 12 cents, or 2 percent, to close at 6.52 per share Friday. On Wednesday AMR Corp, the parent of American Airlines, reported a quarterly loss and warned of worse ahead, citing soaring fuel prices and intense competition.
The group suffered a loss of 214 million dollars in the three months to September 30, after squeezing out a net profit of one million dollars a year earlier. Losses were equal to 1.33 dollars a share, after zero profit or loss per share a year ago, it said. Total sales rose 3.4 percent to 4.76 billion dollars.
AMR chairman and chief executive Gerard Arpey said the carrier was being buffetted by record high fuel prices, a weak revenue environment and a series of hurricanes that hit the United States in August and September, disrupting flights and increasing costs.
Arpey warned of "a fourth quarter loss significantly larger than that recorded in the third quarter," due to fuel prices and seasonal revenue weakness. American also said it would squeeze passengers in tighter to make more money, adding in a portion of the coach seats previously removed from the aircraft of its MD80 and Boeing 737, 767 and 777 fleets.