American Airlines warns 25,000 workers they could lose jobs

DALLAS (AP) — American Airlines is notifying about 25,000 workers that their jobs could be eliminated in October because of plunging demand for air travel, adding to the toll that the virus pandemic is taking on the airline industry.

American’s top executives said on Wednesday that the number of furloughs could be lower if enough workers take buyouts or accept partially paid leave for up to two years.

The airline’s two top officials said they thought American might avoid furloughs because they believed demand for air travel would “steadily rebound” by October 1 as the virus outbreak weakened.

“That unfortunately has not been the case,” CEO Doug Parker and President Robert Isom said in a memo to employees. “And with infection rates increasing and several states reestablishing quarantine restrictions, demand for air travel is slowing again.”

Air travel plunged 95 per cent from early March to mid-April, then grew slowly until levelling off in July as virus cases surged in the South and Southwest.

File photo shows American Airlines jets sitting idly at their gates at Sky Harbor International Airport in Phoenix. PHOTO: AP

United States (US) airlines accepted up to USD25 billion in federal aid to help cover payroll costs in exchange for not cutting jobs until October. American received USD5.8 billion in cash and loans, Delta got USD5.4 billion and United Airlines received USD5 billion. The aid likely only delayed massive job cuts throughout the airline industry.

Last week, United told 36,000 employees that they could lose their jobs in October. Delta sent notices to more than 2,000 pilots.

American’s cuts would fall most heavily on flight attendants, with nearly 10,000, or 37 per cent, getting notices of potential furloughs — the industry’s preferred term for layoffs of workers who have rehiring rights. About 4,500 ground workers, 3,200 mechanics and 2,500 pilots will get notices.

“It’s brutal,” pilot and spokesman for the union of American’s pilots Dennis Tajer said. “This puts the number on how serious the virus is for airlines and our economy.”

Several airline unions are lobbying for another USD25 billion in federal payroll aid through March. American’s pilots want the government to buy billions of dollars worth of seats per month — creating more space between passengers — until the pandemic ends.

Separately, Delta Air Lines said on Wednesday that it expects to take a charge of USD2.7 billion to USD3.3 billion to cover the cost of early retirements and buyouts for employees as it shrinks in response to a sharp decline in air travel. The airline said this week 17,000 employees agreed to depart.