American Airlines to furlough up to 175 pilots

NEW YORK (CNNMoney.com) -- American Airlines announced Friday it will furlough up to 175 pilots in the first half of 2010.

In the first round scheduled at the end of February, the Fort Worth, Texas-based company will put 80 of its active 7,800 pilots on leave to "better align the size of our pilot organization with the size of our current operation," the company said in a statement.

American Airlines said the remainder of the furloughs will be completed by the end of June.

A lower-than-expected pilot attrition rate and a reduction in capacity have resulted in a surplus of pilots, the company said.

AMR Corporation (AMR, Fortune 500), American Airline's parent company, slashed passenger capacity by 7.2% in 2009 to battle a slump in traveling. The company announced Wednesday it lost $344 million during last quarter and $1.5 billion in 2009.

American Airlines already has 1,800 pilots on furlough, most recently sending 300 pilots packing five years ago. A portion of those pilots have been recalled since 2005, but they may be among those who will be let go again. American said it bases cuts on seniority, letting go first those with the shortest tenure with the company.

American Airlines said it worked with Allied Pilots Association, the union that represents the pilots, to ensure the first wave of furloughed pilots will be eligible to file for the COBRA health coverage subsidy. At the end of last year, Congress extended the deadline for jobless Americans to file for health benefits and COBRA through the end of February.

Shares of AMR Corp. were up almost 1% in midday trading.