MIAMI – In a press release today, American Airlines (AA) announced its intentions to force out 19,000 employees. These layoffs, effective October 1, would be one of the largest mass layoffs the industry has seen during this pandemic.
The hardest hit will be the flight attendants, with 8,100 being furloughed. Pilot furloughs will reach 1,600. The airline is calling them furloughs rather than layoffs because they are unionized workers with recall rights.
To understand the severity of American Airlines’ situation, it plans to come out of the pandemic with approximately 40,000 fewer employees than it had in March.
Layoffs Across the Industry
Of the US “Big Three” consisting of AA, United Airlines (UA), Delta Air Lines (DL), it is the first that has offered the worst Voluntary Permanent Leave Of Absence (VPLOA) packages, which means more and more involuntary furloughs and layoffs for the airline.
So far from AA, there have been 12,500 VPLOA packages taken and 11,000 more in October, now adding to that the whopping 19,000 of involuntary furloughs and separations. This drop from 140,000 to 100,000 employees from the beginning of the pandemic to, hopefully, the end, is a 30% chunk of AA’s workforce.
Delta Air Lines had said it was on course to not require involuntary layoffs, but just yesterday it released numbers projected at almost 2,000 furloughs. Its latest Voluntary Early Out Program (VEOP) package would pay an employee for 3 years after separation from the company with health benefits. Even though more employees took the VEOP than DL needed, union ALPA and DL management have realized it still was not enough.
United has held off on mass furloughs and separations, with its VEOP packages only available to the most senior Pilots so far. With mass furloughs from AA, and DL adjusting its visions, it is only inevitable that we will see something big from UA soon.
United has warned of mass layoffs, with numbers even bigger than these AA ones released today, but has waited to give employees more time to consider their options.
A Message From Doug Parker and Robert Isom
American Airlines CEO Doug Parker and President Robert Isom broke the news to AA employees in a company memo today. “Today is the hardest message we have had to share so far…” they write, “…the announcement of involuntary staffing reductions effective October 1st.”
“As you all know, the Payroll Support Program of the CARES Act protected our team against involuntary separations through Sept. 30th…The only problem with the legislation is then when it was enacted in March, it was assumed that by Sept. 30 the virus would be under control, and demand for air travel would have returned. That is obviously not the case.”
Parker and Isom outlined some rough operating percentages for the airline moving forward. “Based on current demand levels, we at American now plan to fly less than 50% of our airline in the fourth quarter, with long-haul international particularly reduced to only 25% of 2019 levels.”
“In short American’s team will have at least 40,000 fewer people working Oct. 1 than we had when we entered this pandemic…Across the mainline and regional carriers, more than 12,500 of our colleagues have made the difficult decision to leave the company permanently through early out programs or retirement.”
The memo continued, “Another 11,000 team members have offered to be on a leave of absence in October”…Even with those sacrifices, approximately 19,000 of our team members will be involuntarily furloughed or separated from the company on Oct. 1.”
Hope for AA Pilots and Their Families?
For such a dark time in the lives of AA employees and their families, Parker and Isom did not fail to mention that not all is lost for those whose jobs are in jeopardy. The Payroll Support Program is slated to end on September 30, but if elected officials on Capitol Hill can extend the program, things could look a lot brighter.
The executives added, “The one possibility of avoiding these involuntary reductions on Oct. 1 is a clean extension of the PSP. Led by your labor unions, with the support of the industry, we have generated enormous bipartisan support for such an extension.”
“But, despite this broad bipartisan support, a PSP extension is tied up in a larger COVID-19 relief package, which our elected officials haven’t been able to negotiate. SO we must prepare for the possibility that our nation’s leadership will not be able to find a way to further support aviation professionals…”
We Are All America Airlines
Parker and Isom ended on a somber thank you, saying, “We are all American Airlines, we will survive, and one day, thrive again. Thank you for all you are doing now, and tomorrow, to carry us through.”
During such tumultuous and chaotic political times in America, it is going to take nothing short of a miracle to get a PSP extension from Capitol Hill but never say never. Let’s hope 2020 is done throwing more and more curveballs at us, and that these 19,000 separations are the worst it is going to get for AA and the industry.
Featured image: American Airlines Boeing 787-8. | Photo: © Jakkrit Prasertwit.