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American Airlines Announces Furlough Notices
American Airlines became the most recent carrier to send Worker Adjustment and Retraining Notification (WARN) letters to its employees. These letters indicate that potential layoffs or furloughs are possible in the near future as air travel demand continues to suffer due to COVID-19.
In a letter to employees, CEO Doug Parker and President Robert Isom stated that they had hoped the CARES Act would have covered payroll until the industry started to rebound by Oct. 1. However, with cases spiking and travel restrictions being put into place by certain states, this seems increasingly more unlikely to happen. The letter stated, “Our passenger revenues in June were more than 80% lower than June 2019.”
In the letter, the carrier said that WARN notices would be issued to 25,000 employees. This equates to nearly 20% of American’s employees. Although the airline has stated that they would have approximately 20,000 excess employees this fall, they also hoped to limit the number of furloughs that take place.
In order to do so, the Dallas-based airline announced voluntary leave programs available to frontline workgroups. The airline offered two different leave programs including an early-out program and an extended leave program. There is an enhanced early-out program for employees with over 10 years of seniority and a basic program for those with less than 10 years. For those willing to take time off, the carrier announced leaves of 15, 18 and 24 months.
Nearly 37%, or 9,950, of the airline’s flight attendants will receive WARN notices along with 2,500 pilots, 4,500 fleet service employees and 3,200 maintenance and related team members. Other groups facing significant layoffs include passenger service agents and reservations agents. Both groups will see at least 20% of their workforce receive notices.
The carrier noted that there was support for an extension of the Payroll Support Program. In the letter obtained by AirlineGeeks, the airline stated that all of their unions had “expressed support for legislation” to extend support for an extra six months. If this extra payroll support were to pass, it would delay furloughs until March 31 of next year.
Like most airlines in the United States, American has slowly increased flying over the past few months with July’s schedule sitting at just over half of what it was last year. While not great, it is an improvement from June when the airline operated just one-third of the schedule compared to the previous years.
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