American Eagle says it wants to cut labor costs by $75 million to compete for work in providing feeder service to American Airlines flights.
In the letter to employees, CEO Dan Garton outlined the plan and said changes to each work group's wages and benefits will vary based those of their peers at competiting airlines. He also said he wanted to lessen restrictions on regional flying and using larger jets.
Garton said American Airlines still plans to increase traffic by 20 percent from five key domestic markets, which will in turn boost the need for regional service.
"Projected productivity improvements at American Eagle would mean a reduction of approximately 500-600 positions. Most, if not of all, of those reductions are expected to be achieved through normal attrition over a period of time." said Bruce Hicks, American Eagle spokesperson.
American Eagle's flight attendants said they were asked for $9.2 million in cuts, per year, for 8 years with no layoffs. Instead, the company wants to impose wage cuts and freezes for those at the top end of the pay scale.
"They undervalue us. We're the people that work with our customers day in and day out. It's our customer ratings that bring people back," said Robert Barrow, president of the AFA, representing the American Eagle Flight attendants.
He said top scale flight attendants make about $33,000 a year and that the company wants to cap that number.
American Airlines and American Eagle are both owned by AMR Corp. All three filed for bankruptcy protection in November. In 2011, Eagle's revenue was $2.5 billion, about 10 percent of AMR's total.
NBC 5's Ray Villeda contributed to this report.