American Airlines on Wednesday said it will send furlough notices this week to about 13,000 employees as a second round of federal payroll aid is set to expire next month and travel demand remains in tatters.
“The vaccine is not being distributed as quickly as any of us believed, and new restrictions on international travel that require customers to have a negative COVID-19 test have dampened demand,” American’s CEO Doug Parker and President Robert Isom wrote in a note to staff.
Rival United Airlines last Friday sent similar furlough warnings to 14,000 staff members.
The latest $15 billion Congress approved for U.S. carriers late last year required airlines to recall the employees they furloughed in the fall and maintain payroll through March 31. It was the second round of Covid aid for the industry; Congress gave airlines $25 billion last March to keep them from cutting employees through the fall.
Airline labor unions are now seeking $15 billion more in federal payroll support for the industry to keep jobs through Sept. 30 and American’s Parker and Isom said they back another round of aid.
“We are fully behind our union leaders’ efforts to fight for an extension and we will lend our time and energy to support this effort in every way we can,” they said.
Fresh from reporting record annual losses of $34 billion, U.S. airline CEOs last month warned they didn’t expect a strong rebound in air travel in the near future.
Employers are legally required to give staff notice about possible layoffs or temporary furloughs generally 60 days in advance. The notices do not guarantee that recipients will ultimately lose their jobs.
American is offering early retirement programs for employees who have been in their workgroups for more than 10 years, including up to $150,000 in a retirement health reimbursement package and some travel benefits. It is also rolling out leaves of absence for a year or 18 months with partial pay.
“Obviously, issuing these required WARN notices isn’t a step we want to take,” Parker and Isom said. “Tens of thousands of our colleagues have faced extreme uncertainty about their job security over the past 12 months, and that’s on top of the emotional stress all of our team has faced during an incredibly difficult year.”
American’s CEO Parker warned staff last week that the carrier is still overstaffed for current demand projections and that furloughs could be on the way.
CNBC.com
