American to cut 5,000 jobs, ground more planes

September 15, 1993|By New York Times News Service

American Airlines said yesterday that it would eliminate 5,000 jobs by the end of 1994 and ground more planes to reduce capacity. The cuts punctuated American's strategy for achieving long-term profitability by shedding uncompetitive routes, a plan its employees have criticized.

AMR Corp. Chairman Robert L. Crandall told securities analysts the eight 727s the airline planned to retire in 1995 would be retired next year, and it would ground four DC-10s next year, and seven more over 1996 and 1997.

Those retirements will come in addition to the grounding of 31 DC-10s that the airline announced in March. American said the groundings would leave 635 planes by the end of 1997, or 37 fewer than it had in December.

The cuts, including dropping several unprofitable European routes this winter, will reduce the systemwide capacity of American by 4.5 percent next year.

American, which has reported net losses totaling $1.23 billion over the past three years, began its first significant job cuts in October, and before this month, had announced 1,700 cuts.

Most of the 5,000 cuts announced yesterday were new, but they included 665 management layoffs disclosed earlier this month.

"If we cannot deploy the planes profitably, we cannot justify flying them," Mr. Crandall said.

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