American To Slash Employee Costs by $1.25 Billion
American to cut $1.25 billion in employee costs
American plans to operate the industry's youngest fleet by 2017. (Photo: Boeing)
American plans to operate the industry's youngest fleet by 2017. (Photo: Boeing)

In a February 1 letter to American Airlines employees, company chairman and CEO Thomas Horton identified $1.25 billion in annual employee-related cost reductions—estimated to involve between 12,000 and 14,000 job cuts—among a list of some $2 billion worth of annual cost-savings initiatives that include restructuring debt and leases, grounding of older airplanes and improving supplier contracts. Now in Chapter 11 bankruptcy, American would also increase revenues by $1 billion a year through what it calls network-scale fleet optimization and product improvements, according to the letter.