American Airlines plans 19,000 furloughs, layoffs in October
DALLAS - American Airlines said Tuesday it will eliminate 19,000 jobs in October as it struggles with a sharp downturn in travel because of the pandemic.
Flight attendants will bear the heaviest cuts, with 8,100 losing their jobs.
The furloughs and management layoffs announced 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.
U.S. air travel plunged 95% by April, a few weeks after the first significant coronavirus outbreaks in the United States. Passenger traffic has recovered slightly since then but remains down 70% 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.
In March, passenger airlines got $25 billion from the government to save jobs for six months, and American was the biggest beneficiary, receiving $5.8 billion. The money, and an accompanying ban on furloughs, expire after Sept. 30, although airlines and their labor unions are lobbying Congress for another $25 billion and a six-month reprieve from job cuts.
When the federal relief was approved, “it was assumed that by Sept. 30, the virus would be under control and demand for air travel would have returned. That is obviously not the case,” American 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 U.S. 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 Oct. 1 is a clean extension” of the payroll relief, Parker and Isom said in their letter to employees.
The union representing American Airlines flight attendants is stunned by the sheer number of involuntary furloughs announced by the Fort Worth-based carrier Tuesday.
“This day is nothing short of devastating. The numbers are astronomical not what we expected,” said Paul Hartshorn Jr. with the union. “We received word of increased numbers this morning just like everyone else did.”
In a statement, an Allied Pilots Association spokesperson said: "We knew this day was coming without more federal money for airline payrolls. We see the dark consequences."
SMU Political Science Professor Mike Davis says while the cuts are disappointing, they're necessary.
“The airlines have to do this in order to have any chance of survival,” Davis said. “The airlines need people to start traveling again and before people start traveling again people have to be confident they're not going to get sick.”
CEO Doug Parker told employees the only way the cuts won't happen is if Congress provides airlines with billions in additional funding.
“We are doubling down our efforts as we've been doing nonstop since March to get that extension of the Payroll Support Program within the CARES Act to keep everyone connected to their paychecks and more importantly their health benefits during this worldwide pandemic,” Hartshorn said.
Airlines were the only industry 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.