AA Job Cuts in Tulsa: 3 Things Oklahomans Should Know

  • Joe Wertz

Kevork Djansezian / Getty Images

More than 2,000 Tulsa workers will likely lose their jobs as part of American Airlines’ bankruptcy restructuring plan, executives announced yesterday.

AMR Corp., the airline’s parent company, filed for bankruptcy in November. About 13,000 employees companywide — more than 30 percent of its mechanic-related workforce — are also slated to lose their jobs.

The Tulsa maintenance base will remain open, officials said, but nearly a third of the 6,800 workers there will lose their jobs during the post-bankruptcy reorganization, according to the Tulsa World.

1. Job Cuts = Economic Losses

As bad as losing 2,100 jobs is, that might not be the end of it, reports the World. The Tulsa job losses could have a $300 million impact on the local economy, Bob Ball, the Tulsa Metro Chamber’s economic research manager told the paper.

Reporter Kyle Arnold on the local economic impact:

Broken down further, the city would lose about $236.1 million in income and $5 million in city and county sales tax revenue.


2. Job Cuts = More Job Cuts

Ball estimates that losing 2,100 Tulsa jobs could lead to the loss of more than 1,400 other jobs, according to the World.

Under the plan announced Wednesday, a Texas maintenance base at Fort Worth Alliance Airport will be closed and 1,200 workers there will lose their jobs. The job losses in Texas could even impact workers in Tulsa, Local 514 spokesman Terry Lesperance told the World‘s D.R. Stewart.

“Tulsa has hired mechanics for the past six months. Those people who have been hired in are absolutely going to be affected by (union seniority) bumping at Alliance and around the system.”

3. Pensions Pose a Problem

About 90 percent of workers who retire at their defined retirement date would not see a change in their benefits, officials said, according to the World.

Here’s the rub: AA has $8.3 billion set aside for pensions. The problem? It needs $18.5 billion to cover its pension promises, reports Planet Money’s Caitlin Kenney.

AA is asking the courts for permission to cut its pension plans for some 130,000 employees and retirees. If the court gives its OKs, the Pension Benefit Guaranty Corp. — a federal agency — will take over the airline’s defined benefit pension plans.

But the federal pension agency has a funding shortfall hovering around $26 billion, and its director doesn’t want any part of the AA pensions, Planet Money reports:

The PBGC, for its part, is pushing back against American’s request.

If the PBGC does wind up on the hook for American Airlines pensions, it would be the largest single claim on the agency since it took over United Airlines pensions plans in 2005.