AMR Layoffs - Impact On Dallas Fort Worth Labor Force

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Parent Category: News

Category: Economic Analysis

In article filed by Fitch Ratings on February 9, 2012, the rating agency has stated that the labor market in the Dallas-Fort Worth region will be "noticeably" impacted after the workforce at AMR Corporation (OTCQB: AAMRQ) begins to be trimmed. However, the intensity of this impact will be spread across individual cities and not be localized to small pockets.

Headquartered in Fort Worth, Texas, AMR is a holding company that owns American Airlines Inc and TWA Airlines LLC, besides two regional airlines - American Eagle Airlines and Executive Airlines. The company filed for Chapter 11 reorganization bankruptcy on December 29, 2011. AMR had over 78,000 employees on its roll as at end of December 31, 2010. The component of wages, salaries and benefits took up roughly 31% of the company's consolidated operating expenses for that year. The company has proposed to shed its overall workforce by over 13,000 employees. This is roughly 16% of the workforce, which is estimated to lead to a saving of 20% in its annual operating cost, or about $2 billion. After the restructuring is in place, these figures will likely add to the unemployment rate of 7.1% recorded in the Dallas-Fort Worth-Arlington MSA region.

AMR has been recording steady losses in the recent years, with the latest financial year clocking $471 million. For 2011, the company will be required to pay about $2.5 billion of principal payments on long-term debt and capital leases, besides contributing $520 million towards pension plans of the employees.

AMR Corporation is headed by Mr. Thomas W. Horton, Chairman & CEO.

Read the analysis by Fitch Ratings, here. Read details of Form 10-K filed by the company with SEC here.