American Airlines said on Tuesday it will cut 19,000 US jobs in October as the COVID-19 pandemic continues to weigh on air travel, unless the government extends aid for airline employee payrolls.
Airlines received $25billion in US government stimulus funds in March meant to cover payrolls and protect jobs through September.
As the money runs out without a travel recovery in sight, airlines and unions have lobbied Washington for another $25billion, but talks have stalled.
Including voluntary exits and leaves, American’s workforce will shrink to around 100,000 in October from the 140,000 it employed in March.
‘In short, American’s team will have at least 40,000 fewer people working October 1 than we had when we entered this pandemic,’ Chief Executive Doug Parker and President Robert Isom said in a memo to employees that was reviewed by Reuters.
The October job cuts comprise 17,500 furloughs of union workers -including 1,600 pilots and 8,100 flight attendants – and 1,500 management positions.
Based on current demand levels, American now plans to fly less than 50 per cent of its normal schedule in the fourth quarter, with international flying reduced to only a quarter of 2019 levels, Parker and Isom said in the memo.
American has previously warned that 25,000 workers could lose their jobs. The final number of cuts will depend on how many employees take offers of buyouts, early retirement or long-term leave.
Meanwhile, Delta Air Lines is set to furlough 1,941 pilots in October, the carrier said in a memo to employees on Monday that noted the fallout from the COVID-19 pandemic and plunging air travel demand.
‘We are six months into this pandemic and only 25% of our revenues have been recovered. Unfortunately, we see few catalysts over the next six months to meaningful change this trajectory,’ Delta’s head of flight operations John Laughter said in the memo.
He said the airline is ‘simply overstaffed’.
Atlanta-based Delta had originally estimated a surplus of 2,558 pilots but reduced the number of involuntary furloughs following early retirement and voluntary departure programs, a spokeswoman said.
But there were still roughly 11,200 active pilots on Delta’s roster, Laughter said, with only about 9,450 needed for the summer 2021 schedule, which the carrier expects will be the peak flying period for the next 12-18 months.
The Air Line Pilots Association, which represents Delta’s pilots, said it was ‘extremely disappointed’ in the decision.
Pilots are the only unionized work group at Delta, which last month said furloughs could be avoided if pilots agreed to a 15 per cent cut to minimum pay.
US airline unions, however, have been reluctant to negotiate pay cuts, having only recently recouped wages lost after the 2001 September 11 attacks and a string of bankruptcies and mergers that followed.
Peers such as American Airlines have said they are trying to keep as many pilots as possible on board due to the costly and timely training required to bring them back in a recovery.
Delta also announced on Monday the retirement of Chief Operating Officer Gil West, who helped lead the integration of Delta and Northwest after joining the company in 2008.
American’s announcement comes less than a week after it revealed that it will be dropping flights to 15 smaller US cities in October when a federal requirement to serve those communities ends.
American said its schedule covering October 7 through November 3 will drop flights to cities including Sioux City, Iowa; New Haven, Connecticut; and Springfield, Illinois.
‘This is the first step as American continues to evaluate its network and plans for additional schedule changes in the coming weeks,’ the airline said in a prepared statement.
More than half of the cities that American is dropping have no other airline service. It will be a major blow to Tweed-New Haven Airport, but the airport’s executive director, Sean Scanlon, held out hope that the loss will be temporary.
‘I’m confident that we will see other carriers here once the industry bounces back from COVID regardless of what happens with American,’ Scanlon said.