American's cost-cutting plan met with some opposition by employees, but many expected it

Wednesday, August 14th 2002, 12:00 am
By: News On 6

DALLAS (AP) _ In the weeks before American Airlines announced its second wave of layoffs in less than a year, company chairman and chief executive Donald Carty had signaled that a restructuring was in the works.

So some employees weren't too stunned by the announcement Tuesday that the world's largest airline was cutting 7,000 jobs, or 6 percent of its work force, retiring its 74-jet fleet of Fokker planes and cutting about 9 percent of its scheduled service in an effort to reduce costs and compete better with low-fare carriers.

``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.''

The cost-cutting initiatives are expected to save the company $1.1 billion a year and help ensure the company's long-term survival. American has lost $2.8 billion since the beginning of last year, the company said.

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.

But American 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.

This time around, 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, union officials said.

Some layoffs could be averted if people take early retirement or share jobs, airline officials said. The layoffs will be completed by next March.

Union officials, powerless to stop the layoffs, said the airline should focus on increasing revenue instead of cutting costs.

An American spokesman, Stephen Tankel, said the airline felt vindicated by the generally positive reaction to the announcement on Wall Street.