MIAMI – American Airlines (AA) warned 25,000 employees of potential pending job cuts. These cuts would be made on October 1 after the airline runs out of federal payroll support.
By taking the support as part of the US CARES act, the airlines agreed to no involuntary layoffs until after September 1.
Memo from American Airlines
The note to employees came from CEO Doug Parker and President Robert Isom. They stated, “We had a stated goal of avoiding furloughs because we believed demand for air travel would steadily rebound by October 1 as the impact of COVID-19 dissipated. This unfortunately has not been the case.”
Parker and Isom went on to say, ” Our passenger revenues in June, while we believe are better than others in the industry, were more than 80% lower than in June 2019. With infection rates increasing and several states reestablishing quarantine restrictions, demand for air travel is slowing again.”
Rise in US COVID-19 Cases
The above comments from Parker and Isom come as several US states including Florida, Texas, Arizona, and California, are seeing massive spikes in recorded cases.
These are all states with large AA hubs, so there is no doubt the airline is being hit most hard by the current lack of demand.
Job Cuts Across The Big Three
Last week, United Airlines (UA) warned 36,000 employees, a whopping 45% of its workforce, of possible job cuts.
These employees include 15,000 flight Attendants, 11,000 customer service and gate agents, 1,000 contact center employees, 225 network operation employees, 5,500 maintenance workers, and 2,250 Pilots.
On the other hand, Atlanta-based carrier Delta Air Lines (DL) is optimistic about not having any involuntary furloughs as 17,000 employees took early-out plans.
However, DL did announce on June 27 that it would be sending notices to roughly 2,500 Pilots regarding possible furloughs.
A spokesperson for the DL confirmed that “In an effort to best prepare our Pilots should furloughs be needed, Delta will send required notices to approximately 2,500 Pilots.”
American Airlines To Right-size to a New Reality
American Airlines’ rough breakdown of employees on notice is as follows; 10,000 flight attendants, 2,500 pilots, 3,000+ maintenance workers, and other customer service, fleet service, dispatch, and simulator employees. AA had over 130,000 employees pre-pandemic.
In the memo, Parker and Isom went on to say “We know American will be smaller going forward and we must right-size all aspects of our airline to adjust to that new reality. Although this is a day non of us wanted to see, we have created new, generous programs intended to help offset as many frontline furloughs as possible.”
According to the Allied Pilot Association, the union who represents AA’s 15,000 employees, says that 800 Pilots have retired and 4,500 have taken temporary leaves.
Parker said late last month that his airlines’ workforce was at least 30% larger than it needed to become years end and 15-20% larger than necessary for next year.