Many U.S. airlines are overstaffed due to reduced flying schedules and low demand for air travel amid the coronavirus pandemic.
American Airlines warned in July that it would have to lay off up to 25,000 flight attendants, pilots and other front-line workers this fall due to the steep decline in travel brought on by the coronavirus pandemic.
The final number came in lower thanks to voluntary employee exits and long-term leaves but the figure is still staggering: 17,500 workers. That is in addition to 1,500 management and administrative workers already laid off.
American CEO Doug Parker and President Robert Isom delivered the news to employees on Tuesday, calling it the most sobering update they’ve had to make since the pandemic began.
“Today is the hardest message we have had to share so far – the announcement of involuntary staffing reductions effective Oct. 1,” the executives said in a memo.
The only thing that will stop the layoffs, the company said, is an extension of the payroll protection program the government approved earlier this year to support key industries until travel demand returned. Travel demand hasn’t returned in sufficient numbers, however, and airline unions are fighting to extend the payroll protection, and thus any layoffs, through March 31.
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Flight attendants will be the hardest hit, with 8,100 being furloughed. Pilot furloughs will total 1,600.The airline calls them furloughs instead of layoffs because they are unionized employees with recall rights.
Including the thousands of employees who have voluntarily agreed to leave the company, permanently or in a long-term leave of absence, American said it will be down to fewer than 100,000 employees on Oct. 1, compared with 140,000 at the start of the pandemic,a decline of nearly 30%.
American needs vastly fewer employees because it will be a significantly smaller carrier come October, at least until travel demand solidly rebounds. The industry’s trade group, Airlines for America, thinks that’s a long way off, recently predicting that it will be 2023 or 2024 until passenger volumes return to 2019 levels.
American, like all airlines, has been slashing flights and more cuts will occur in October as pre-pandemic service requirements tied to the payroll support program expire. The upshot: American said it will have 50% fewer seats for sale in the October-December period compared with a year ago.
That means fewer choices for travelers and potentially higher fares ahead.
“The coming weeks and months will be some of the most difficult we have ever faced,” Parker and Isom said. “No matter how challenging they seem, remember this: The American Airlines team is no stranger to adversity, and in adversity, we always come through. We will come out on the other side of this crisis. Demand will return. Team members will be recalled. The world will find its new normal, and when it does, American is going to be there. Until then, take heart that we will get through this together. The professionalism and care this team has shown over the past six months has been nothing short of extraordinary. We are all American Airlines, and we will survive, and one day, thrive again. Thank you for all you are doing now, and tomorrow, to carry us through.”
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