American to cut wirkers, ground planes

There will be 6840 workers of Airline and 8% flights of American cut by year’s end. The expenses of workforce reductions, 70-millions, will charge against the second-quarter earnings, the carrier said in a memo to employees.
Jeff Brundage, the airline’s head of human resources, said “while we are still working through the specific impact to employee work groups, both voluntary and in voluntary employee reductions commensurate with the overall system capacity reductions are expected companywide as we reduce the size the airline.”
Increasing oil price is the main problem, but the industry cannot raise the fares to keep up with the increasing fuel expenses that have increased by about 70% since last year. Airfares are up an average about 20%, and referring to that airlines have been cutting flights and adding fees for service were included in a fare. Last month, for example, American established a $15 fee for the first piece of checked baggage.
If oil prices were to stay at current levels- they have hesitated at about 140 a barrel this week- U.S carriers could post record losses of more than 13 billion this year, more than the effect from the Sep. 11, 2001, terrorist attacks, according to the Air transport Assn.
In conclusion, major airlines have announced the grounding of nearly 500 planes and cutting of nearly 20000 jobs since May. In addition to American, UAL Corp. has said that its United Airlines would remove 1100 jobs, while Continental Airlines Inc. said this week it might cut as many as 3000 workers from its payroll.
“Everybody is going to be taking these charges to modify the accounting,” said Ray Neidl, an analyst with Calyon Securities.” It’s going to be big. ”