American Airlines is to cut 13,000 jobs, which equates to around 15% of its workforce.
Its parent AMR, which filed for bankruptcy in November, said it needs to cut staff costs by 20%.
It claims this would reduce spending by $2bn (£1.26) and raise revenue by $1bn a year.
AMR also plans to restructure debt and aircraft leases, ground older aircraft, and change workforce contracts, health benefits and pensions.
It hopes to start negotiations with unions shortly.
In a letter to employees, chief executive Thomas W Horton said: "We are going to use the restructuring process to make the necessary changes to meet our challenges head-on and capitalise fully on the solid foundation we’ve put in place."
Unions said the proposals were worse than feared and they would fiercely fight the plans.
by Bev Fearis
