American Airlines, the world’s biggest airline, will cut 19,000 jobs in October when the federal government’s wage support scheme, CARES Act, extended to airlines during the pandemic to help them stay afloat, comes to an end.
More jobs are on the line unless the federal government help is extended, a letter that American CEO Doug Parker and President Robert Isom sent to employees said. The company said that layoff notices were sent out Tuesday to 17,500 employees.
“The only problem with the legislation is that when it was enacted in March, it was assumed that by September 30, the virus would be under control and demand for air travel would have returned,” said the letter. “That is obviously not the case. Based on current demand levels, we at American now plan to fly less than 50% of our airline in the fourth quarter, with long-haul international particularly reduced to only 25% of 2019 levels.”
The world’s largest airline, which had 133,700 employees when 20202 began, intends to reduce headcount by “at least” 40,000 employees. It said that 12,500 had agreed to leave the company with early retirement or buyout packages, and another 11,000 had agreed to voluntary furloughs for October.
“Even with those sacrifices, approximately 19,000 of our team members will be involuntarily furloughed or separated from the company on October 1, unless there is an extension of the [federal help],” said the letter. The CARES Act, which provided up to $50 billion of help to the US airline industry, prohibited airlines from laying off or involuntarily furloughing staff until October 1.
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