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American Airlines offers ideas for more revenue
February 22, 2012

DALLAS (AP) American Airlines says it can boost revenue and make money again by replacing old planes with new ones, strengthening business ties with other airlines, and providing more services.

The airline provided new details about the revenue side of its turnaround plan Tuesday. It boils down to making American more attractive to high-fare business travelers.

American and parent AMR Corp. filed for bankruptcy protection on Nov. 29. American has proposed saving $2 billion a year by eliminating 13,000 jobs, ending traditional pensions, and making other changes. But until Tuesday, it hadn't provided many details of how it hoped to boost revenue by $1 billion per year.

In a letter to employees, AMR chief commercial officer Virasb Vahidi said two-thirds of the extra revenue will come from improving American's service with new planes, and making more use of small jets on routes where American can't profitably fly bigger ones.

Nearly one-third will come from ventures with international partners such as British Airways and Japan Airlines, and closer partnerships with other U.S. carriers.

Those details, however, put American at odds with its pilots, who fear the proposals will result in even more job losses.

American relies on AMR-owned American Eagle to provide flights to and from smaller cities. Its contract with union pilots limits most of those flights to 50-seat planes that aren't economical at today's high fuel prices.

American wants to use bigger regional jets, with up to 88 seats, that could be operated by regional airlines and would displace the larger jets that are flown by its own pilots.

American said the change would better match supply with demand, allowing it to attract passengers with more convenient schedules.

Gregg Overman, a spokesman for the Allied Pilots Association, said American pilots want to do all the flying involving new planes. He said the current restriction on large regional jets "is there to prevent further outsourcing of our jobs."

The airline also wants to press ahead with orders for hundreds of new planes and for more code-sharing deals with U.S. airlines, which Vahidi said will link more passengers to American's international flights.

The goal of all the changes, he said, is to get higher fares by becoming "the preferred airline for high-value customers."

If unions for pilots, flight attendants and ground workers balk at the changes, American can go to the bankruptcy judge in New York and ask him to impose its proposals.

Source :- http://news.yahoo.com/
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