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American Eagle seeks to reduce labour costs by USD75m p/a as part of restructuring

22-Mar-2012 11:57 AM

American Corp, in an American Eagle restructuring update, stated (21-Mar-2012) plans to reduce labour costs by USD75 million p/a as part of bankruptcy restructuring efforts. To reach this cost reduction target, the carrier will make changes in the following areas: "pay, vacations and holidays, company 401(k) contributions, overtime, scheduling restrictions and unproductive work rules". American Eagle CEO Daniel Garton did not disclose whether the airline would eliminate positions although it is expected most jobs will be maintained. The company said it is "absolutely imperative" it reach the cost target to retain as much of its business as possible, adding it plans to reduce American Eagle costs to be "in line with the most competitive regional airlines in the industry". The restructuring plan proposes to make a "substantial transformation" of the fleets of the mainline, American Airlines, and the regional carrier, with older aircraft to be replaced with newer models. It is also seeking to operate a larger regional network, incorporating "more and larger" aircraft. The carrier also noted it is continuing negotiations with vendors and lessors to reduce supplier and facility costs.  [more - original PR - American Airlines Presentation]

The Association of Flight Attendants-CWA (AFA) at American Eagle, representing over 1800 flight attendants at the airline, stated (21-Mar-2012) it is prepared to push back on "overreaching, outrageous contract cuts" presented by the carrier, described by AFA as a "laundry list of cuts to compensation, benefits, work rules and quality of life". Last month, American Airlines detailed USD1.25 billion in proposed labour cuts, including eliminating 13,000 jobs. [more - original PR - Association of Flight Attendants-CWA]