American Airlines to lay off thousands, start charging for all checked bags
American Airlines' parent company is plotting major cuts including job cuts and additional fees.
At its annual meeting Wednesday, Fort Worth-based AMR Corp. officials said that high fuel costs will bring additional fees — including a $15 charge for travelers' first checked bag — thousands of layoffs, and retirement of more than 75 aircraft from its American Airlines fleet.
The new baggage fee is effective for tickets purchased on or after June 15.
The airline giant expects to shave 11 percent to 12 percent of its domestic flights in the fourth quarter. This will result in the grounding by year's end of approximately 40 to 45 American Airlines jets, 35 to 40 American Eagle regional jets, plus some number of Eagle turbo-props, says Gerard Arpey, chairman and chief executive.
AMR (NYSE: AMR) had already planned to retire some of its MD-80s, which are less fuel-efficient than others in its fleet, and replacing them with 34 new 737 aircraft next year, and an additional 36 in 2010 cheap payday loans.
The tightened flight schedule will result in job cuts at American and its subsidiary, American Eagle. Arpey said layoffs would be across the board and could number in the thousands.
The company reported that fuel prices have increased more than 10 percent since its first-quarter results five weeks ago when it lost $328 million. The company's fuel expenses were up more than $660 million in the first quarter.
"If $125-per-barrel oil is the new reality, preserving the progress we have made is going to require some significant and difficult changes," Arpey says.
American Airlines serves both Oakland International Airport and San Francisco International Airport.