American Airlines to cut 19,000 jobs after US payroll aid expires
The US airline says the involuntary job cuts could be avoided if legislators extend payroll support
New York — American Airlines will cut 19,000 workers once federal payroll aid expires as scheduled on October 1, capping a 30% workforce reduction since the coronavirus pandemic began to torpedo travel demand.
About 17,500 employees will be furloughed, meaning they are eligible to be called back when conditions improve, while 1,500 previously announced cuts to management staff will take effect, the airline said on Tuesday. American is the first major carrier to disclose the extent of shrinking operations to adjust to passenger numbers that are down 70% from 2019.
American’s plan heralds thousands more job cuts at US airlines after September 30, when job protections linked to federal financial aid expire. Debate has stalled in Congress over a six-month extension of the government’s $25bn payroll support programme for passenger carriers, which would carry the same restrictions on workforce cuts. American said the involuntary job cuts could be avoided if legislators extend payroll support.
“We have come to you many times throughout the pandemic, often with sobering updates on a world none of us could have imagined,” CEO Doug Parker and president Robert Isom said in a letter to employees that was disclosed in a regulatory filing. “Today is the hardest message we have had to share.”
American fell 3.6% to $12.96 in New York, a day after airlines rallied on upbeat expectations for coronavirus treatments and vaccines. The shares tumbled 53% this year through to the end of Monday, with only United Airlines declining more on a Standard & Poor’s index of major US carriers.
Based on demand, American plans to fly less than 50% of its normal schedule in the fourth quarter, with long-haul international at only 25% of 2019 levels, Parker and Isom said.
The planned job cuts will lower American’s total employment to less than 100,000, compared with about 140,000 in March. About 12,500 workers have left voluntarily and 11,000 will be on leave starting October 1.
The Fort Worth, Texas-based airline previously warned that as many as 25,000 workers could be laid off, while United put its number at 36,000.
Delta said on Monday that it will furlough 1,941 pilots, but has not outlined changes for other employee groups. Southwest Airlines has said enough employees took early retirement and leave that it will have no furloughs through the end of 2020.
More than 150,000 workers at the four largest US carriers already have taken early departures or agreed to temporary leave of various length.
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