American Airlines outlined a business plan to transform the airline and restore it to industry leadership, profitability and growth. The plan targets an annual financial improvement of more than $3bn by 2017, including $2bn in cost savings and $1bn in revenue enhancements. The additional cash flow will enable American to renew its fleet and to invest several hundred million dollars per year in ongoing improvements in products and services to deliver a world-class travel experience for customers. The improved cash flow will also allow American to further reduce its debt and become financially stronger in the years after its emergence from the restructuring process.
A fundamental element of American's plan includes employee cost reductions across all work groups. American informed employees on February 2nd, that all groups, including management, must reduce their total costs by 20%. While the savings from each work group will be achieved somewhat differently, the plan provides that each will experience the same percentage reduction. These reductions would result in average annual employee-related savings of $1.25bn from 2012 through 2017. American's business plan and proposals encompass a total reduction of approximately 13,000 employees. Included in the total employee impact is the expected result of a previously launched redesign of American's management and support staff structure that will reduce 15% of management positions.