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VOL. 126 | NO. 245 | Friday, December 16, 2011

AMR's American Eagle May Cut 223 Jobs in February

DAVID KOENIG | AP Airlines Writer

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DALLAS (AP) – American Eagle, the regional-flying affiliate of American Airlines, may furlough 223 Texas-based pilots and flight attendants in February as the company cuts costs under bankruptcy protection.

American Eagle notified Texas officials of the possible furloughs on the same day that its CEO told employees that bankruptcy reorganization will mean job losses and unpopular decisions.

Eagle vice president Cathy McCann told the Texas Workforce Commission in a letter received Thursday that 119 pilots and 104 flight attendants in the Dallas-Fort Worth area could lose their jobs around Feb. 13. The employees work for Executive Airlines, an Eagle division that operates turboprop planes between U.S. and Caribbean points.

Eagle spokesman Ed Martelle said that as the company considers cost-cutting moves, "there is a strong possibility" that turboprops used between Dallas-Fort Worth International Airport and other U.S. destinations will be returned to the leasing company in late January.

American, the nation's third-biggest airline, has about 74,000 employees, and Eagle has about 14,000, including part-timers.

AMR Corp., which owns American Airlines and Eagle, filed for bankruptcy protection on Nov. 29. The company hopes to reduce debt and aircraft-lease obligations and reduce labor costs while in bankruptcy.

Separately, AMR's new CEO, Thomas W. Horton, told employees Thursday that the company will cut jobs as it goes through bankruptcy. He didn't give a figure.

"We will have to make very tough and sometimes unpopular decisions that will impact people's lives," Horton said.

Horton said American will focus in coming weeks on renegotiating debt and aircraft-lease deals. He said the company will ground some planes and shrink before it can grow again. According to a Wolfe Trahan & Co. analyst, AMR has cut passenger-carrying capacity for the next three months by 2.5 percent, nearly double the airline's own November forecast.

Horton said American needed to get "competitive labor contracts" with unions – the company says its labor costs are higher than other airlines.

The CEO also said that "opportunists" might try to buy American, sell it or break it up, but he advocated keeping the company together. Analysts have speculated that US Airways Group Inc. could try to buy American.

J.P. Morgan analyst Jamie Baker estimated that AMR will use bankruptcy protection to shrink 10 percent and cut labor and pension costs by $500 million a year, less than the company is targeting. He said AMR will emerge financially "much improved," but not superior to bigger rivals United and Delta.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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