American Airlines, a subsidiary of parent company,
) has sent layoff notices to 11,000 employees, of which they expect
roughly 40% or 4,400 workers to lose their jobs.
The layoff warnings were send mainly to mechanics and ground
workers, including 3,000 in the Dallas-Fort Worth area, 3,000 in
Tulsa, Okla, 1,200 in Miami, 1,100 in New York and 800 in Chicago.
As many as 1,800 flight attendants and 800 ground staff have quit
the company voluntarily for bonuses promised by management.
American Airlines resorted to the layoff action as it tries to
revive under bankruptcy protection filed in November 2011. In the
last few days, the airlines also received federal bankruptcy
judge's approval for three union contracts to cancel their old
contracts and introduce new working terms and conditions.
Beside the layoff, the company will also take other stringent
measures including retirement benefits reduction, increase in
maximum working hours for pilots, termination of supplement
retirement plan, and closing of a maintenance hub in Texas. All
these actions are expected to save roughly $1 billion annually for
Apart from cost reduction efforts, American Airlines is also
working toward increasing its revenue base without the need for
spending on flight additions. The company is relaxing
revenue-sharing terms with other airlines, especially to boost
The current Zacks Consensus Estimate for the third quarter of
2012 is 22 cents, representing a year-over-year growth of 145.8%.
Estimates for 2012 and 2013 are ($1.08) and 79 cents, reflecting
annual growth of 67.2% and 173.1%, respectively.
AMR Corporation currently bears a Zacks #3 Rank, implying a
short-term (1-3 months) Hold rating. The company's prime competitor
Delta Air Lines Inc.
) has a Zacks #4 (Sell) rating and
United Continental Holdings, Inc.
) holds a Zacks #5 (Strong Sell) rating.
AMR CORP (AAMRQ): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
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