[P]DALLAS, Nov 6 (Reuters) - Taking a bite out of food costs was one of several money-saving proposals AMR Corp. ([A href=http://money.excite.com/jsp/qt/full.jsp?time=0&symbol_search_text=AMR]AMR[/A]) presented to analysts on Wednesday, but wage concessions from employees were not an item the parent of American Airlines, the world''s largest carrier, placed on the table.[/P]
[P]AMR said earlier this week it needs to cut operating costs by up to $4 billion, up from the $3 billion figure that had often been cited by top management, in order to compete with budget carriers as cost-conscious consumers increasingly search out the cheapest fares.[/P]
[P]Among the items top executives presented at a meeting with airline analysts were ways to save fuel, squeeze savings through more efficient ticket distribution systems, and shift capacity to more profitable routes.[/P]
[P]But wage cuts with unionized employees, which have sought by other major carriers such as United Airlines, were not a way AMR believes will help them through harrowing financial times.[/P]
[P]We need to restructure. We need to rethink how we do our labor relations, what our contracts look like, what our business looks like, and you don''t do that unless your employees are with you, said Jeff Brundage, the company''s vice president of employee relations.[/P]
[P]You can''t do that by fiat, he said.[/P]
[P]AMR is in talks with its pilots union over a new contract. A federal mediator has been called in to help the negotiations, which have plodded along for over a year.[/P]
[P]American pilots contend that they are paid about 20 percent less than their counterparts at carriers such as United, the No. 2 U.S. carrier.[/P]
[P]AMR executives said one of the greatest challenges American faces is keeping a base of highly profitable business travelers through preferred services and extensive networks, while at the same time slashing costs so it can compete with low-cost carriers, such as Southwest Airlines.[/P]
[P]Don Carty, AMR''s chairman and chief executive officer, has said the airline has already identified $2 billion in structural cost cuts and AMR is halfway to its goal of being able to compete in an environment where price is king.[/P]
[P]Among proposals American announced to analysts were plans to shift capacity away from areas in Latin America where air traffic has declined due to downturns in local economies, and increase capacity to better-performing regions, such as the Caribbean and Mexican resort destinations.[/P]
[P]There will be more automation at the airport, and the airline has already cut back on some services that do not weigh heavily on the minds of bargain-hunting consumers, such as in-flight meals.[/P]
[P]Separately, AMR said it will spin off regional carrier Executive Airlines in a move that could bring the struggling carrier about $700 million. The company said in a statement, it has signed a letter of intent to sell Executive Air, which operates under the name American Eagle, to Puerto Rican hotelier Joaquin Bolivar.[/P]
[P]Last month, AMR reported a third-quarter net loss of $924 million, after special items, as the lingering downturn stemming from the Sept. 11 attacks and anemic revenue in the industry walloped its bottom line. Despite the massive cost-cutting campaign, AMR said its fourth-quarter loss was likely to exceed the third-quarter loss.[/P]
[P]American has cut its payroll and capacity as well as retired airplanes as it tries to save money.[/P]
[P]Last week, it brought its new system, designed to reduce rush-hour peaks of flights to a more even flow throughout the day, to its home field of Dallas/Fort Worth International Airport. AMR is hoping the system will be a major part of a plan announced in August aimed at saving it over $1 billion a year through the more efficient allocation of its resources. [/P]
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[P][A href=http://money.excite.com/jsp/nw/nwdt_rt.jsp?section=news&cat=INDUSTRY&feed=reu&news_id=reu-n06280471&date=20021106]http://money.excite.com/jsp/nw/nwdt_rt.jsp?section=news&cat=INDUSTRY&feed=reu&news_id=reu-n06280471&date=20021106[/A][/P]
[P]AMR said earlier this week it needs to cut operating costs by up to $4 billion, up from the $3 billion figure that had often been cited by top management, in order to compete with budget carriers as cost-conscious consumers increasingly search out the cheapest fares.[/P]
[P]Among the items top executives presented at a meeting with airline analysts were ways to save fuel, squeeze savings through more efficient ticket distribution systems, and shift capacity to more profitable routes.[/P]
[P]But wage cuts with unionized employees, which have sought by other major carriers such as United Airlines, were not a way AMR believes will help them through harrowing financial times.[/P]
[P]We need to restructure. We need to rethink how we do our labor relations, what our contracts look like, what our business looks like, and you don''t do that unless your employees are with you, said Jeff Brundage, the company''s vice president of employee relations.[/P]
[P]You can''t do that by fiat, he said.[/P]
[P]AMR is in talks with its pilots union over a new contract. A federal mediator has been called in to help the negotiations, which have plodded along for over a year.[/P]
[P]American pilots contend that they are paid about 20 percent less than their counterparts at carriers such as United, the No. 2 U.S. carrier.[/P]
[P]AMR executives said one of the greatest challenges American faces is keeping a base of highly profitable business travelers through preferred services and extensive networks, while at the same time slashing costs so it can compete with low-cost carriers, such as Southwest Airlines.[/P]
[P]Don Carty, AMR''s chairman and chief executive officer, has said the airline has already identified $2 billion in structural cost cuts and AMR is halfway to its goal of being able to compete in an environment where price is king.[/P]
[P]Among proposals American announced to analysts were plans to shift capacity away from areas in Latin America where air traffic has declined due to downturns in local economies, and increase capacity to better-performing regions, such as the Caribbean and Mexican resort destinations.[/P]
[P]There will be more automation at the airport, and the airline has already cut back on some services that do not weigh heavily on the minds of bargain-hunting consumers, such as in-flight meals.[/P]
[P]Separately, AMR said it will spin off regional carrier Executive Airlines in a move that could bring the struggling carrier about $700 million. The company said in a statement, it has signed a letter of intent to sell Executive Air, which operates under the name American Eagle, to Puerto Rican hotelier Joaquin Bolivar.[/P]
[P]Last month, AMR reported a third-quarter net loss of $924 million, after special items, as the lingering downturn stemming from the Sept. 11 attacks and anemic revenue in the industry walloped its bottom line. Despite the massive cost-cutting campaign, AMR said its fourth-quarter loss was likely to exceed the third-quarter loss.[/P]
[P]American has cut its payroll and capacity as well as retired airplanes as it tries to save money.[/P]
[P]Last week, it brought its new system, designed to reduce rush-hour peaks of flights to a more even flow throughout the day, to its home field of Dallas/Fort Worth International Airport. AMR is hoping the system will be a major part of a plan announced in August aimed at saving it over $1 billion a year through the more efficient allocation of its resources. [/P]
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[P][A href=http://money.excite.com/jsp/nw/nwdt_rt.jsp?section=news&cat=INDUSTRY&feed=reu&news_id=reu-n06280471&date=20021106]http://money.excite.com/jsp/nw/nwdt_rt.jsp?section=news&cat=INDUSTRY&feed=reu&news_id=reu-n06280471&date=20021106[/A][/P]
