AMERICAN ANNOUNCES STAFF REDUCTIONS

American Airlines today notified employees that it is forced to reduce jobs by at least 20,000. The employment losses result from the airline’s 20 percent schedule reduction, the complexity of new security procedures, and a sharp reduction in passenger traffic – all creating a state of emergency at American and across the entire airline industry. American said employees would learn the specific status of their jobs in the next few days.

American Chairman and Chief Executive Officer Don Carty said the day could only be described as ‘heartbreaking’.

"This is, without a doubt, the most difficult thing I have had to do in my two decades at American," said Carty in a letter to employees. "I have declared a state of emergency at American Airlines. This declaration is an official recognition that—hard as it may be to accept—our company’s very survival depends on dramatic change to our operations, our schedule, and worst of all our staffing levels."

American said staff would be reduced in management and support staff groups, and all other work groups across the company. These job cuts will impact American, American Eagle and TWA.

The carrier said it would ordinarily provide some form of alternative to those who are being impacted. However, except for certain kinds of leaves, none of the traditional separation practices, such as early retirements and stand-in-steads, are financially feasible in light of the current crisis. American said that, given its current cash crunch, those programs would actually worsen its financial situation.

American said its mission is to operate a safe and secure airline while it and the rest of the industry struggles to survive. In addition to the job cuts, American said it has identified significant product and service changes – especially those things that increase the amount of ground contact with airplanes and that ensure a more dependable operation given the new security regulations. The company will be announcing those changes shortly.

"The events of September 11 will forever change our country, our industry and our company," said Carty.

Carty said he would return to Washington, D.C. today to lobby for an airline relief package, which the industry believes is its only chance to survive the national tragedy and the financial crisis facing the industry.