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Road to recovery

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13,000 airline jobs face ax

American slashes labor costs in bid to remake itself

– The parent of American Airlines wants to eliminate about 13,000 jobs – 15 percent of its workforce – as the nation’s third-biggest airline remakes itself under bankruptcy protection.

The company aims to cut labor costs by 20 percent under bankruptcy protection and will soon begin negotiations with its three major unions. Some management jobs would also be cut.

AMR also proposes to end its traditional pension plans. The move has been strongly opposed by the airline’s unions and the U.S. pension-insurance agency.

Thomas W. Horton, AMR Corp. CEO, said Wednesday that the company hopes to return to profitability by cutting spending by more than $2 billion a year and raising revenue by $1 billion a year.

AMR lost $884 million in the first nine months of 2011, and Tuesday it disclosed a $904 million loss for December alone. It has lost more than $11 billion since 2001.

“We are going to use the restructuring process to make the necessary changes to meet our challenges head-on and capitalize fully on the solid foundation we’ve put in place,” Horton said in a letter to employees.

Employees have braced for bad news for weeks. AMR, American and short-haul affiliate American Eagle filed for bankruptcy protection in November. Horton said in December that the company would emerge from bankruptcy with fewer workers.

“I expect dismay and outrage from our membership as details of the proposal are made public,” said Laura Glading, president of the flight attendants’ union.

The company has about 88,000 workers. Most are represented by a union. The biggest cuts would come from the ranks of maintenance workers.