American Airlines announces plan to cut 19,000 jobs—unless Congress extends pandemic aid

August 25, 2020, 6:13 PM UTC

After months of warning about looming job losses once their pandemic bailout expires, the country’s largest airlines are getting closer to making the cuts.

American Airlines expects to eliminate 19,000 jobs, through 17,500 involuntary furloughs and 1,500 layoffs, on Oct. 1, the airline said Tuesday. About 1,600 pilots and 8,100 flight attendants will be included in the furloughs, according to a letter the airline sent to employees.

Another 12,500 employees have retired and 11,000 are taking a voluntary leave of absence for the month of October—meaning that American expects to cut a total of 40,000 employees from a workforce that numbered 140,000 at the start of the pandemic. The airline had previously warned that it expected to furlough up to 25,000 workers in October.

American’s announcement, a day after Delta Air Lines warned pilots that it plans to furlough nearly 2,000 of them in October, comes as the airline industry grapples with the approaching expiration of the CARES Act’s $25 billion in federal aid, despite an ongoing plummet in global travel. American expects to be flying at less than 50% of its capacity by the fourth quarter of 2020, it said Tuesday, with long-haul international travel at only a quarter of last year’s levels.

Under the terms of the federal aid, carriers were blocked from mass layoffs before Oct. 1. Airlines and labor unions have been pushing for an extension of the industry’s job protections as part of another COVID-19 relief package, a proposal which has received bipartisan support, but the overall relief bill remains stalled.

“The one possibility of avoiding these involuntary reductions on Oct. 1 is a clean extension of the PSP [Payroll Support Program],” American CEO Doug Parker and president Robert Isom wrote in the letter to employees.

But “we must prepare for the possibility that our nation’s leadership will not be able to find a way to further support aviation professionals,” they added. “If you haven’t already done so, you can let your elected officials know just how important a PSP extension is to you, your families and our economic recovery.”

An American spokesman said that all furloughed employees could potentially be recalled to work at a future date, but that the company does not currently know when that process might start. Most will maintain some level of medical and travel benefits while on furlough, though the exact benefits vary depending on the contracts with the employees’ labor unions, he said.

Read More

CryptocurrencyInvestingBanksReal Estate