Workers Likely To Lose Out In AMR Bankruptcy

When American Airlines reorganizes under bankruptcy protection, it's not likely to seek widespread layoffs. The airline already made big cuts during the economic downturn. More likely, the company will seek big givebacks in retiree pensions and benefits.

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STEVE INSKEEP, HOST:

And let's follow-up now on yesterday's news that American Airlines filed for Chapter 11 bankruptcy protection. It's part of an effort to cut debt and reduce labor costs. NPR's Sonari Glinton reports on what a post-bankruptcy American Airlines might look like.

SONARI GLINTON, BYLINE: During the economic downturn, American Airlines already pared down its work force. Analysts don't think there will be massive layoffs this time.

AARON GELLMAN: Many elements of labor are going to pay a terrible price for this.

GLINTON: Aaron Gellman teaches Transportation at the Northwestern University. He said the first place the company will likely cut is pilot salaries, and then...

GELLMAN: I think there are also others who are quite innocent to be hurt in the long run as they cut costs, which they must do in bankruptcy. So I don't think it's a good thing for the workers at all. It sure is not job creation.

GLINTON: Gellman says pilots and mechanics are relatively safe, but he says customer service jobs will likely take a hit. James Ashe is a forensic accountant. He specializes in bankruptcy. He says this bankruptcy is really about wages and other benefits.

JAMES ASHE: What's clearly going to play out on this - and it's playing out all over the country, including in state and local governments all over the country - is trying to pull back on the liability associated with paying out retirement benefits.

GLINTON: Ashe says reduced pensions, retirements that start much later and higher healthcare costs for employees are likely to be the new picture for the friendly skies. Sonari Glinton, NPR News.

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