Advertisement
YOU ARE HERE: LAT HomeCollectionsBankruptcy

American Airlines vows to bounce back from bankruptcy

February 10, 2012|By Hugo Martin

Passengers who fly American Airlines out of Los Angeles International Airport may feel uneasy about the future of the Fort Worth carrier because it filed for bankruptcy a few months ago and announced plans to lay off 13,000 workers.

But representatives for the nation’s third-largest airline are touring the country, trying to allay the fears of passengers and others by spreading the message that American will come out of bankruptcy stronger than ever.

Top American officials visited Los Angeles last week to tell reporters that, once the airline emerges from bankruptcy, it plans to add up to 20% more flights from its five most important hubs: New York, Los Angeles, Chicago, Dallas-Ft. Worth and Miami.

The airline officials also unveiled plans to order enough new planes over the next five years to transform one of the industry’s oldest fleets of jets to the newest.

“At the end of the day, our plans will allow us to return to the top of the heap,” said Kevin Cox, American’s vice president of state and community affairs.

As for the planned layoffs of 13,000 workers, Cox said high labor costs, an aging fleet and rigid union contracts had forced the company to “compete with one hand behind our backs.”

By 2017, Cox said the airline hopes to save $2 billion annually by cutting labor costs, closing facilities and renegotiating contracts. It also believes it can add $1 billion in new revenue by offering better service on newer planes.

The message of hope and change was probably aimed at the airline’s suppliers and customers, said corporate turnaround specialist James McTevia of Bingham Farms, Mich.

Suppliers and customers were likely shaken by the news of the bankruptcy, he said, and American probably was trying to persuade them to continue to work with and patronize the airline.

“The advertising and marketing that is going on is a tactic that many companies use that facilitates the best success of coming out of Chapter 11,” McTevia said.

ALSO:

American Airlines aims to cut 13,000 jobs

American Airlines to close operations in Burbank

Federal agency pressures American Airlines to save pensions

Advertisement
Los Angeles Times Articles
|
|
|