American Airlines warned employees on Wednesday that it could slash up to 25,000 jobs in the fall as the airline industry continues its financial tailspin amid the coronavirus pandemic.
Under the CARES Act, U.S. airline companies received significant financial aid so that they could meet their payroll obligations through the summer. As a result, airlines are prohibited from firing or laying off any of their employees through the end of September. However, in its memo to employees, American Airlines signaled that cuts could begin Oct. 1.
"Today, we will begin issuing Worker Adjustment and Retraining Notification (WARN) letters to
our unions and represented team members in some states," CEO Doug Parker and President Robert Isom wrote. "We hate taking this step, as we know the impact it has on our hardworking team members. From the time the CARES Act was signed in March, we had a stated goal of avoiding furloughs because we believed demand for air travel would steadily rebound by Oct. 1 as the impact of COVID-19 dissipated. That unfortunately has not been the case."
They added: "Our passenger revenues in June, while we believe are better than others in the industry, were more than 80% lower than June 2019. And with infection rates increasing and several states reestablishing quarantine restrictions, demand for air travel is slowing again."
In an effort to limit the number of furloughs that will take place come October, the pair of executives said that the company was introducing "enhanced leave and early-out programs."
Parker and Isom also noted proposed legislation in Congress that would extend the Payroll Support Program an additional six months.
"As currently proposed, the effect of this legislation would be to delay any involuntary furloughs until March
31, 2021, at which point there would most certainly be more demand for air travel, and along with that demand, much less need for involuntary furloughs throughout the industry," they explained.
The memo also provided a breakdown of how different sub-sects of employees would be affected; the company's flight attendants received the most WARN notices at 9,950 — 37 percent of the company's flight attendants.