American Airlines warns 13,000 employees could be furlough as aid set to expire
American Airlines has warned in an employee memo that about 13,000 workers could be furloughed on April 1, when the latest payroll support from Congress is set to expire.
The Payroll Support Program, which was included in last year's CARES Act, was renewed through the end of March in the coronavirus relief package passed at the end of 2020. Initially, 19,000 American Airline employees were furloughed last year during stalled negotiations in Congress over the latest relief package.
“We are nearly five weeks into 2021, and unfortunately, we find ourselves in a situation similar to much of 2020,” CEO Doug Parker and President Robert Isom said in a memo to employees, obtained by The Hill.
“As we closed out last year with the successful extension of the Payroll Support Program (PSP), we fully believed that we would be looking at a summer schedule where we’d fly all of our airplanes and need the full strength of our team. Regrettably, that is no longer the case.”
American Airlines recalled the 19,000 workers who were furloughed last year when U.S. airlines received $15 billion in the $900 billion package, which extended the program for the industry.
Parker and Isom said in the memo that vaccine distribution and international travel restrictions will prevent the airline from rebounding.
“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,” they said.
American Airlines reported a net loss of $8.9 billion for 2020 attributed to the lack of travel during the coronavirus pandemic. It had a net loss of $2.2 billion in the fourth quarter of the year, and revenue was down 64 percent compared to the last three months of 2019.