October 6, 2010 / 1:00 PM / 9 years ago

AMR to bring back 800 furloughed workers

CHICAGO (Reuters) - AMR Corp, parent of American Airlines, said on Wednesday it will bring back nearly 800 furloughed flight attendants and pilots to handle network expansion on international routes as it launches a partnership with British Airways Plc and Spain’s Iberia.

The long-awaited deal within the Oneworld alliance, which begins on Wednesday, will see the three carriers cooperate on flights between Europe and North America.

The move, termed a “recall” in the industry, involves 545 flight attendants and 250 pilots.

AMR President Tom Horton told Reuters that the partnership across the Atlantic and efforts to forge a new one with Japan Airlines across the Pacific could pave the way for more recalls.

“I would not rule out in the future, further recalls stemming from our network activities.”

There are currently 1,350 flight attendants on furlough at AMR. There are 1,980 AMR pilots on furlough.

The company said the first group of 25 pilots will be recalled in mid-November. More will be recalled at a rate of about 30 per month.

Flight attendant recall notices will be issued to about 225 flight attendants in October, with more notices following.

The U.S. airline industry has been battered in recent years by an economic downturn that drained travel demand. Top carriers, including American, slashed capacity to match their supply with demand. Demand has since begun to rebound.

Horton said the carrier’s partnerships with foreign airlines, as well as a recent reallocation of resources to key business travel hubs, will generate $500 million a year.

“If you look at mergers in the industry, that would stack up pretty well against merger synergies,” Horton said.

A recent merger of UAL Corp with Continental Airlines to form a new United Airlines aims to generate $1 billion to $1.2 billion in annual revenue and cost benefits by 2013.

Some industry experts say the merger will cause AMR to lose a competitive advantage in the business travel market. But Horton says AMR is growing at key hubs and on key routes that are important to business travelers.

He declined to give a consolidation outlook for AMR but said he would not rule out more mergers among major U.S. airlines.

Shares of AMR were up 8 cents or 1.3 percent at $6.19 on the New York Stock Exchange on Wednesday morning, off an earlier high at $6.38. The Arca airline index was down 0.2 percent.

Reporting by Kyle Peterson in Chicago, Rhys Jones and in London and Tracy Rucinski in Madrid, editing by Gerald E. McCormick and Matthew Lewis

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