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American Airlines and Pilot Union Reach Furlough Agreement
American Airlines and their pilot union, Allied Pilots Association, have reached an agreement to reduce the number of redundancies this fall. According to the Chicago Tribune, the two sides have reached an agreement allowing some pilots to alternate months of flying till May, or take leave while still receiving training. It is not known the number of pilots that would be eligible for the offer. Approximately 2,500 pilots at American are at risk for involuntary furlough on October 1.
The agreement between the two parties will reduce the number of pilots needed to take involuntary furloughs. Earlier in the week, American Airlines executives stated the airline still had too many employees for the reduced demand caused by the Covid-19 pandemic. Airlines have been working with their labor groups to reduce the number of involuntary furloughs and have taken measures such as voluntary long-term leave and early retirements.
At American Airlines, 800 pilots have already agreed to early retirement. However, the demand for travel in the United States has stalled due to an uncontained increase in cases. Similarly, international demand remains low as the border restrictions continue and case numbers continue to rise. This has lead to the need for furloughs, not seen widely in the industry since the 2008 recession.
Other airlines have already reached deals to help avoid furloughs. Earlier in July, Delta Air Lines announced it would need to furlough 2,500 pilots unless demand changed, and since that announcement 2,200 pilots have agreed to terms to take early retirement. United Airlines has given notice to 2,250 pilots but has also said it may need to increase that to 3,900 if demand doesn’t improve.
The Covid-19 pandemic has been devastating to airlines and already three airlines have been forced to end operations, and another may be closing soon. Labor is the biggest cost for airlines so furloughs and layoffs across the company are required in order for the airlines to survive. All three major airlines in the United States have announced layoffs across all departments in the struggle to survive the downturn in demand.
The move between American Airlines and its pilot’s union is the first of its kind to be announced. However, it is likely that similar deals will emerge with other airlines, as the companies and unions look to minimize layoffs. In addition, Congress is attempting to negotiate a new deal to extend the CARES Act payment protection till early next year. If such a deal comes to fruition, it would see thousands of jobs, at least temporarily, saved until next year.
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