One of America’s largest carriers, American Airlines has confirmed it will be cutting 19,000 staff when government stimulus measures end in October.
American Airlines, which has 140,000 staff in total, has been forced by the government to hold off on cutting staff until September, a clause of the U.S. government’s $25 billion aid package that was offered to struggling airlines.
Under the terms of the CARES Act, airlines are not able to lay off staff until September 30th. Now, however, airlines are calling for the government to extend the package, otherwise risking large scale layoffs for their employees.
“When you remove the floatation device of the CARES Act investment, things begin to sink.” – Dennis Tajer
American Airlines earlier this week confirmed it would be forced to cut 19,000 staff while releasing passenger capacity numbers and fourth-quarter forecasts. American Airlines says it expects less than half of its 2019 figures for domestic flights, and less than 25% capacity for its international flights.
American Airlines’ CEO, Doug Parker alongside president Robert Isom have said that “we have come to you many times throughout the pandemic, often with sobering updates on a world none of us could have imagined.”
“Today is the hardest message we have had to share so far – the announcement of involuntary staffing reductions effective October 1.”
The airline expects the number of staff employed after the layoffs will be 40,000 lower than pre-pandemic numbers, which is set to include around 17,5000 union workers like flight attendants, pilots and mechanics, as well as 1,500 management and administration positions.
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American Airlines is just one of a number of U.S. airlines feeling the impact of the pandemic. Earlier this week Delta Airlines announced plans to furlough just under 2,000 of its pilots, while United has said 36,000 of its employees are at risk, and Spirit Airlines saying it has asked 2,500 of its pilots to accept lower hours.
Southwest Airlines has anticipated it won’t lay off any staff in 2020 after asking more than 25% of its employees to accept a leave or buyout settlement.
American Airlines told its staff last month that 25,000 jobs were at risk of being cut in October, and urged its employees to accept either a buyout, early retirement package or a combination of paid and unpaid leave.
The company says that 12,500 staff left permanently, with an additional 11,000 on leave in October when the anticipated job cuts transpire.
Both airlines and unions are calling on additional government support for the industry, with the initial proposal winning bipartisan support, however the U.S. Congress is yet to reach an agreement on further aid.
CEO Doug Parker and President Robert Isom have said in their statement that “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.”
“That is obviously not the case,” they added, stating that “one possibility of avoiding these involuntary reductions on October 1st,” was to enact further support legislation for the industry.
Dennis Tajer, spokesperson for the Allied Pilots Association which represents more than 15,000 pilots in America has told CNBC, that “when you remove the floatation device of the CARES Act investment, things begin to sink.”
CNBC’s report also quotes Julie Hedrick, president of the Association of Professional Flight Attendants who said that “today is a devastating day for the hardworking, frontline employees at American Airlines.”
“We will continue the fight for a clean extension of the aviation Payroll Support Program to keep our members, as well as aviation workers across the industry, connected to their paycheck and health benefits during this worldwide health crisis,” she concluded.