Cry for aid? American Airlines set to cut 19,000 jobs in October

Airline execs say that involuntary layoffs could be avoided if US government extends payroll relief.

This is an American Airline ticket counter at Greater Pittsburgh International Airport on Thursday, May 7, 2020. (AP Photo/Gene J. Puskar)
The airline industry was the only one to get special treatment in the United States government's $2.2 trillion virus-relief package passed in March [File: Gene J. Puskar/The Associated Press]

American Airlines said on Tuesday that it will eliminate 19,000 jobs in October unless the United States government extends its financial lifeline to US carriers that are struggling with a sharp drop in travel demand and passenger numbers during the coronavirus pandemic.

Flight attendants will bear the heaviest cuts, with 8,100 losing their jobs.

The furloughs and management layoffs announced on Tuesday are in addition to 23,500 employees who accepted buyouts, retired early or took long-term leaves of absence. American began the year with about 140,000 employees but expects fewer than 100,000 to remain in October.

US air travel plunged 95 percent by April, a few weeks after the first significant coronavirus outbreaks in the US. Passenger traffic has recovered slightly since then, but remains down 70 percent from a year ago, and carriers say they need fewer workers.

American’s announcement comes one day after Delta Air Lines said it will furlough 1,941 pilots in October unless it reaches a cost-cutting deal with the pilots’ union.

An American Airlines Boeing 737-823 lands at Miami International Airport, Monday, July 27, 2020, in Miami.American Airlines said Tuesday, Aug. 25 that it will furlough or lay off 19,000 employees in OIn March, passenger airlines got $25bn from the government to save jobs for six months, and American Airlines was the biggest beneficiary, receiving $5.8bn [File: Wilfredo Lee/The Associated Press]

In March, passenger airlines got $25bn from the government to save jobs for six months, and American was the biggest beneficiary, receiving $5.8bn. The money – and an accompanying ban on furloughs – expire after September 30, although airlines and their labour unions are lobbying Congress for another $25bn and a six-month reprieve from job cuts.

When the federal relief was approved, “it was assumed that by September 30, the virus would be under control and demand for air travel would have returned. That is obviously not the case,” American Airlines CEO Doug Parker and President Robert Isom said in a letter to employees on Tuesday.

American plans to fly less than half its usual schedule – and only one-fourth of its lucrative international service – in the fourth quarter. The airline, based in Fort Worth, Texas, announced last week that it will pull out of 15 smaller US cities in October, a move that was seen as a warning shot to Washington that it should approve more money for airline payrolls.

“The one possibility of avoiding these involuntary reductions on October 1 is a clean extension” of the payroll relief, Parker and Isom said in their letter to employees.

The airline industry was the only one to get special treatment in a $2.2 trillion virus-relief measure approved in March. There is broad support in Congress for extending that help, but it is stalled by a breakdown in negotiations between the White House and congressional Democrats over a new aid package.

Source: AP

More from Economy
Most Read