American Airlines is planning to cut as many as 19,000 jobs by October. The airline stated that it will begin culling its workforce when the deadline mandated under the terms of its $25 billion federal aid package expires.
Even with the aid, the airline explained that the continued disruptions to its business caused by the prolonged pandemic are still putting a lot of pressure on its finances, giving it no other choice than to implement drastic cost-cutting measures.
Under the terms of the federal air program, which the company agreed to earlier in the year, American Airlines is prohibited from laying off any of its workers up to September 30. The aid it received was mostly used by the airline to retain its more than 140,000 employees.
The airline said in a statement on Tuesday that air travel demand has mostly not yet recovered, even with the lifting of travel restrictions. The company estimated that its domestic air travel capacity will likely be 50 percent less during the fourth quarter compared with the same period last year. It forecasts that its international long-haul flights could be much worse, at an estimated 25 percent capacity.
American Airlines' chief executive officer, Doug Parker, stated in a note to employees that the decision to lay off some of its staff was a hard decision to make. He explained that due to the current situation, which "none of us could have imagined," the company will need to conduct involuntary staffing reductions starting on October 1.
The carrier stated that the involuntary cuts will affect around 17,500 union workers, including pilots, mechanics and flight attendants. Around 1,500 administration and management jobs will also be removed as part of the plan. Since it started offering voluntary exit packages, around 12,500 employees have chosen to leave the company permanently.
Other carriers such as Delta Air Lines and United Airlines have also made similar announcements. On Monday, Delta stated that it will be furloughing around 1,941 pilots. However, the company stated that it might hold off on the cuts if it reaches a cost-cutting agreement with the pilot's labor union. United also issued a similar warning to employees pending the outcome of its previously rolled out voluntary exit programs.
