On Wednesday, American Airlines issued a memo to employees stating that the company will further downsize its workforce. It will issue notices to 25,000 employees that will have to face potential furloughs on October 1.
The CEO Doug Parker and President Robert Isom said in the memo that the airline will try to avoid some of those furloughs. These furloughs include around 10,000 flight attendants and 2,500 pilots.
“We hope to reduce the actual number of furloughs. Significantly through enhanced leave and early-out programs for represented workgroups, which we are announcing today,” the memo said.
Executives expect it could take years for travel demand to return to its 2019 highs. Meanwhile, airlines are grappling with how deeply to make cuts to hold on to enough cash to survive.
The Bailout Plan
However, the state’s bailout for the airline industry restricts them to layoff, involuntary furloughs, or implement pay cuts for employees. But this condition will be lifted on October 1 and many US airlines are planning to layoff thousands of employees. Analysts are estimating that up to a third of the airline industry’s jobs could disappear.
U.S. airlines received $25 billion in government aid to cover most of their payroll costs under the broad $2.2 trillion stimulus package approved in March. They agreed not to furlough any workers until the funding runs out Oct. 1.
However, on Wednesday, the two American Airlines executives also said the airline supports a union-led effort to lobby Congress. To extend the CARES Act relief money, which will expire at the end of September through March 2021. However, extending the timeline is necessary due to the “much longer impact of the pandemic than the airline was anticipating when the CARES Act was enacted.”
“We know American Airlines will be smaller going forward and we must right-size all aspects of our airline to adjust to that new reality,” they said.
Furloughs by United Airlines
However, another major US airline, United Airlines has earlier this month, said that the airline will be laying off half of its workforce this fall. The airline will be laying off 36,000 workers, which includes 15,000 flight attendants, 11,000 customer service and gate agents, 5,550 maintenance employees and 2,250 pilots will receive layoff notices.
Previous Layoffs by American Airlines
In the last few months of the pandemic, American Airlines laid off its management and support staff to cut costs. It laid off about 30% of its staff. There are about 17,000 employees in airline management and support staff. The airline took these steps to cut costs as the flights were down by 90%.