American Airlines Issues Layoff Notices, Cuts Flight Schedule

American Airlines (NYSE:AMR) said on Tuesday it has notified more than 11,000 workers they could lose their jobs as part of its bankruptcy reorganization, and said it was cutting flights by one to two percent for the rest of September and October.

The U.S. carrier expects fewer than 40 percent of those it sent notices to, or 4,400 people, will actually be laid off in November and December, spokesman Bruce Hicks said.

The layoff notices were required under the Worker Adjustment and Retraining Notification Act, which requires employees to be informed 60 days before major layoffs or plant closures.

"The notices will look worse than the actual layoffs," said Jamie Horwitz, a spokesman for the Transport Workers Union, which represents workers that received WARN Act notices.

Horwitz said about 800 employees had agreed to leave American voluntarily, a move that will further reduce the number of expected layoffs.

According to a letter sent by American to the Transport Workers Union, notices of potential layoff were sent to more than 3,000 workers in Dallas and Fort Worth, Texas, where American is based; about 3,000 people in Tulsa, Oklahoma; just over 1,200 in Miami; nearly 1,000 in New York; about 900 in Chicago and lesser numbers in other U.S. cities.

In February, American outlined plans to cut as many as 14,000 jobs as it looks to streamline in bankruptcy.

American Airlines, the third-largest U.S. air carrier, filed for Chapter 11 protection in November, citing a need to decrease labor costs. The company has signed non-disclosure agreements with carriers including US Airways Group as it evaluates a potential merger.

US Airways won the backing of unions that represent American ramp workers, pilots and flight attendants earlier this year by promising to preserve thousands of jobs should a merger with American occur.

RISE IN CANCELLATIONS

American's flight cuts for September and October were set partly due to an increase in pilot sick days and greater maintenance reports by flight crews led to cancellations and delays, Hicks said. American operates about 1,700 flights a day.

Last week, the unit of AMR Corp <AAMRQ.PK> began implementing cost cuts for its unionized pilots after gaining bankruptcy court approval to abandon its collective bargaining agreement with the Allied Pilots Association.

According to data from tracking service FlightAware.com, American Airlines in recent days has cancelled more flights than other major U.S. airlines.

On Monday, for example, American cancelled about 2.1 percent of its scheduled flights, or about 73, compared with an average of 0.4 percent for other major U.S. airlines that day, FlightAware said.

Mark Duell, vice president of operations at FlightAware, said cancellations at American have been well above the rest of the U.S. airline industry for the past two weeks.

Pilot union spokesman Gregg Overman said on Tuesday that sick rates for American pilots have not deviated from normal historical rates, based on the union's tracking. He said there have been more mechanical delays.

The pilots are the only major work group at American that have not agreed on contract concessions since the airline filed for bankruptcy in November last year.

In a message on Tuesday, union president Keith Wilson said pilots were "angry" since American began imposing new work terms that cut their compensation and benefits.

The pilots union is conducting a strike vote through October 3, but has previously said it will not walk out unless it is legal to do so.