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For American Airlines, layoffs, reduced benefits and greater productivity are not enough–retiree benefits are on the line

Since 2001, AMR, American Airlines parent company, has lost $10 billion while other airlines became profitable—at least for the past few years. Last November, the carrier filed for Chapter 11 bankruptcy protection. Now, AMR is suing to stop providing healthcare and life insurance benefits for its retired employees, according to a July 6, 2012 Washington Post article.

AMR owns American Airlines as well as now bankrupt carrier TWA. AMR paid over $1.35 billion for healthcare and life insurance benefits to its retirees in 2010. If AMR gets its way so as to cut costs, the company’s 40,000 retirees will be without these benefits. Current employees will also loose the benefits unless they pay for them on their own.

American claims that it has the right to modify benefits and claims that they never “promised” the benefits would last throughout a retiree’s full life.

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