American Airlines Looks to Downsize With Executive Buyouts and Job Cuts

Nearly five years after closing its merger with US Airways, American Airlines plans to trim its corporate bureaucracy.

In a message Tuesday to employees, American CEO Doug Parker and President Robert Isom said the company has more executives than required since it has completed most of the difficult work of integrating the two airlines.

They said most cuts will come through job elimination and attrition, but noted some executives may lose their jobs. They also said executives who have been with American at least two years and leave voluntarily will be eligible for severance.

“Our current organizational structure resulted largely from integration work that followed our merger and, as all companies do from time to time, we need to evaluate our current organization with a goal to operate more productively,” Parker and Isom said. “This work starts at the top.”

An American spokesman declined to say how many jobs will disappear. But as part of this effort, the airline is not expected to reduce the number of front-line workers who interact with customers.

Most of the new cuts will focus on employees holding the title of director or above.

“This is an opportunity for team members at those levels to reflect on their current roles and their futures,” Parker and Isom said.

The news comes a little more than a year after United Airlines did a similar post-merger restructuring. The airline culled its ranks of directors, managing directors and vice presidents, and some executives that stayed were assigned different duties. Like American, United never said how many executives left.

Big Workforce

American Airlines Group had 128,600 full-time employees at the end of the first quarter, an increase of 3.5 percent, year-over year, according to a recent filing.

In 2013, a similar filing shows, American Airlines Group employed roughly 110,00 workers. About 60,000 worked for American. Another 32,000 worked directly for US Airways, while 18,000 worked for regional airlines owned by US Airways and American.

As at any airline, the vast majority of American’s workforce consists of front-line employees, including pilots, flight attendants and customer service agents.

American’s stock price closed down 93 cents on Tuesday, off 2.19 percent. For the year, American’s stock is off 22 percent. American, like its competitors, has been been paying higher fuel prices than a year ago, though overall demand for travel remains robust.

American’s job cuts were first reported by The Forward Cabin, a frequent flyer blog.