Just weeks after American Airlines announced its plans to file for Chapter 11 bankruptcy, the company has already broken a promise to employees. Once remaining steadfast in their assurance that neither consumers nor employees would likely be affected by the airline bankruptcy, the company announced pension cuts and mandatory furloughs for many employees.
The Ugly Truth
American Airlines is currently one of the largest, and most expensive to operate, airlines in the United States. Topping the charts of labor costs, the company feels they have little choice but to trim their employee stock as part of the American Airlines bankruptcy plan.
For now, most of the cuts will be made to American’s smaller, sister airline American Eagle. It is expected that 119 American Eagle pilots, based out of Dallas-Fort Worth International, will face layoffs or mandatory unpaid absences. These cuts come in addition to the job loss of 20 pilots last week, to which the company felt were necessary for debt restructuring to take place.
There has been no word of route closings or terminal shut downs as once discussed. While American remains committed to its debt reorganization many are anticipating cuts in flights, routes and further reductions in services. As America Airlines works its way out of debt and back into profitability other airlines, such as Delta, are capitalizing on the airline’s misfortune by adding more flights into Dallas-Fort Worth in hopes of gaining more niche in the local consumer base.