American Airlines plans to lay off some 19,000 employees starting on October 1 if the U.S. government does not extend an aid package to U.S. airlines to further stem the financial effects of the Covid-19 pandemic. In a memo from airline CEO Doug Parker and president Robert Isom, employees received word that the job cuts could result in the loss of at least 40,000 positions, cutting by a third the 140,000-strong workforce American employed before the Covid crisis took hold in the U.S.
So far 12,500 employees have taken voluntary departure packages and another 11,000 will take involuntary leaves of absence in October. Of the additional 19,000 involuntary layoffs, 17,500 involve furloughs and 1,500 involuntary separations among management. Of the 27,000 flight attendants American employed pre-pandemic, 2,700 have left the company permanently, 4,500 will take voluntary leave in October, and 8,100 will be on furlough. Of the 15,000 pilots the company employed before the pandemic, 1,200 have left the company permanently, 700 will take voluntary leave in October, and 1,600 will be on furlough.
The announcement comes just five days before the scheduled expiration of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and with it the legislation’s Payroll Support Program (PSP), which included involuntary layoff protections for employees of any airline that accepted part of a $25 billion grant package. The CARES Act also prevented airlines’ abandonment of service to communities served before they applied for their portions of the grant. American has also said it would end service to 15 small and medium-size cities on October 1.
“The only problem with the legislation is that when it was enacted in March, it was assumed that by September 30 the virus would be under control and demand for air travel would have returned,” said the letter from Parker and Isom. “That is obviously not the case. Based on current demand levels, we at American now plan to fly less than 50 percent of our airline in the fourth quarter, with long-haul international particularly reduced to only 25 percent of 2019 levels.
“The one possibility of avoiding these involuntary reductions on October 1 is a clean extension of the PSP,” the letter added. “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 yet 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 and the service we provide, especially to smaller communities.”