American Airlines warns that it may drop 25,000 employees

Over the past weeks, many airline companies have warned that they will be reducing their staff numbers to cut costs amid the coronavirus pandemic.

American Airlines (AAL) said on Wednesday that it may cut-off 25,000 of its employees by October 1 when the federally funded payroll support programs end. The list includes 10,000 flight attendants, 2,500 pilots, 3,000 maintenance workers, and other workers such as fleet service workers, customer service and reservation agents, instructors and simulator engineers, and dispatch employees, according to the airline leadership.

American Airlines Job Cut details. 

“We hate taking this step,” chief executive Doug Parker wrote in a memo. “We had a stated goal of avoiding furlough because we believed demand for air travel would steadily rebound by Oct. 1 as the impact of Covid-19 dissipated.”

A few months back, American Airlines took $5.8 billion in the federally funded payroll support under the CARES ACT to pay employees and help boost liquidity as flight demand dropped. Part of the conditions for taking the support required airlines to agree to cease involuntary layoffs until September 30.

 The federal law also demands that companies must give employees at least 60 days notification prior to mass lay-offs. Many airlines have already set up plans to either lay off employees or offer them buyouts and early retirement packages. Some airline companies like United Airlines have already begun to notify layoff staff. Last week, United notified 36,000 or 45% of its employees of the coming layoff and furloughs by the time the federally funded payroll support program runs out. Delta Air Lines also announced last week that it wanted to avoid involuntary furloughs by all means. Instead, it offered employees buyouts and early retirement packages which 17,000 have voluntarily signed up for.

Like Delta Air Lines, American Airlines intends to offer its 130,000 employees voluntary exit packages in an attempt to keep the numbers of layoffs and furloughs really down.

“We know American will be smaller going forward and we must right-size all aspects of our airline to adjust to that new reality,” the American leadership wrote. “Although this is a day none of us wanted to see, we have created new, generous programs, intended to help offset as many frontline furloughs as possible.”

According to Allied Pilot Association, the union representing American Airlines 15,000 pilots, about 800 pilots have voluntary retired early and about 4,500 pilots have taken voluntary temporary leaves with partial pay.