American Airlines notified some 25,000 workers that their jobs could be cut in October due to falling demand for flights, which would increase the damage that the coronavirus pandemic is causing to the airline sector.
The company’s top two executives said Wednesday that the number of licensed employees could be lower if enough workers accept termination of their contract or a partially paid leave of up to two years.
The executives said they thought American could avoid the licenses because they believed that demand for passenger flights would “rebound steadily” by October 1 as the pandemic abated.
“Unfortunately, that was not the case,” CEO Doug Parker and company president Robert Isom said in a memorandum to employees. “And because of increased infection rates and the reinstatement of quarantine restrictions in several states, the demand for air travel is slowing down again.”
Commercial flights decreased 95% from the first days of March to mid-April, and then slowly increased to a stable level in July due to the increase in infections in the southern and southwestern United States.
US airlines accepted federal assistance of up to $ 25 billion to cover payroll costs in exchange for not firing people until October. American received $ 5.8 billion in cash and credits; Delta 5,400 million and United Airlines 5,000 million. Those resources likely only delayed large-scale cuts in the airline sector.
Last week, United warned 36,000 employees that they could lose their jobs in October. Delta sent notices to more than 2,000 pilots.
The cuts in American would affect flight attendants the most, and nearly 10,000 of them, 37%, received notices of possible licenses, the industry-preferred term for layoffs of employees entitled to rehire. Some 4,500 ground workers, 3,200 mechanics and 2,500 pilots will receive notices.
“It’s brutal,” said Dennis Tajer, pilot and spokesman for the American Pilots Union. “This highlights the severity of the virus for airlines and our economy.”
On the other hand, Delta Air Lines reported Wednesday that it expects to assume a charge of between $ 2.7 billion and $ 3.3 billion to cover the costs of early retirement and contract terminations, part of a reduction in size due to the sharp decrease in demand. .
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