American Airlines Cuts 19,000 More Jobs; 40,000 Workers Lost in Pandemic

Aug. 26, 2020
That figure includes an additional 19,000 job cuts that will take effect Oct. 1, barring another round of federal aid that so far Congress doesn’t seem ready to approve.

At least 40,000 American Airlines workers — about 30% of the Fort Worth-based company’s work force — will have lost their jobs by Oct. 1 because of the pandemic, airline officials say.

That figure includes an additional 19,000 job cuts that will take effect Oct. 1, barring another round of federal aid that so far Congress doesn’t seem ready to approve, airline officials disclosed Tuesday. Those cuts were in addition to roughly 21,000 cuts — mostly voluntary leaves and departures — already made during the summer.

American Airlines officials on Tuesday unveiled details of the job losses, which are spelled out in an 8-K form filed by the company with the Securities and Exchange Commission. The 8-K form is required of publicly traded companies to notify shareholders of major changes.

Flight attendants were among the hardest hit. Of 27,000 flight attendants, 8,100 will be on furlough and 4,500 will be on voluntary leave, officials said. Another 2,700 took a voluntary early out package during the summer.

“Today is a devastating day for the hardworking, frontline employees at American Airlines,” Julie Hedrick, national president of the Association of Professional Flight Attendants, said in a statement.

She called upon Congress to take action and stem the losses.

“There is still time for Congress to act,” she said. “We will continue the fight for a clean extension of the aviation Payroll Support Program to keep our members, as well as aviation workers across the industry, connected to their paycheck and health benefits during this worldwide health crisis.”

Of 15,000 pilots, 1,600 will be placed on furlough and 700 will be on voluntary leave. About 1,200 took a voluntary early out package in the summer.

The jobs figures include employees at American Airlines and its American Eagle regional subsidiaries, including Envoy Air, PSA Airlines Inc. and Peidmont Airlines Inc.

The job cuts include 800 maintenance workers, 2,225 employees in fleet services, 1,275 in passenger services, 150 dispatch workers and 12 flight crew training and simulator instructors, according to the SEC 8-K filing.

In all, American Airlines is shrinking its work force from about 140,000 people as recently as March 1 to about 100,000 people worldwide effective Oct. 1.

‘Sobering updates’

In a letter to employees, American chairman and chief executive officer Doug Parker and president Robert Isom described the job losses unveiled Tuesday as “sobering updates on a world none of us could have imagined.”

Parker and Isom said that, while federal assistance helped the airline stay afloat through September, it won’t be enough to pay the bills beyond that. Thus, the job cuts will be necessary.

The airline has received $5.8 billion in grants and loans under the CARES Act that Congress passed in the early weeks of the pandemic, and also is expected to close on another $4.75 billion loan from the U.S. Treasury during the third quarter. However, there doesn’t appear to be appetite in Washington to extend the airlines another lifeline, beyond what has already been offered.

Other major airlines are feeling the pain as well.

Delta Air Lines reportedly plans to furlough nearly 2,000 pilots unless an agreement can be reached with that company’s pilots union on a way to cut costs. Also, on Tuesday, Spirit Airlines and the Air Line Pilots Association International (ALPA) reached an agreement to spare 600 employees from being furloughed — with nearly half of the company’s 2,500 pilots agreeing to temporarily work fewer hours.

Nationwide, more than 11,000 airline pilots have received notices of potential furlough, according to ALPA, which represents about 63,000 pilots in the United States and Canada.

“I’m extremely proud of the willingness of our pilots to help each other and ensure that no Spirit pilot goes without a paycheck,” Capt. Scott Vallach, chairman of ALPA’s Spirit Airlines Master Executive Council, said in an email. “I also want to thank Spirit management for partnering with us to sit down and find a path that helps our airline survive while keeping all of our pilots employed.”

American, while bolstering its operations at DFW Airport, where it is the dominant carrier, also has dropped service to many smaller markets to slash operating costs.

“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,” Parker and Isom wrote. “So, as Sept. 30 approaches, we have announced reductions in service, including the complete elimination of service to certain markets in early October, and today we are announcing the related reductions in our workforce.”

North Texas impact

Company officials didn’t elaborate on how many of the lost jobs are in North Texas, but the impact is likely to be huge locally.

American boasted roughly 33,000 employees in the Dallas-Fort Worth region prior to the COVID crisis.

The company last year opened a $350 million headquarters campus near Texas 360 and Trinity Boulevard in far northeast Fort Worth, just south of the company’s global hub at DFW Airport. About 12,000 employees initially worked at the new campus, although the number has dropped significantly in recent months as the company has offered incentives for workers to leave.

Asking Congress for help

Also in their letter, Parker and Isom urged employees to ask their members of Congress to support an extension of the federal Payroll Support Program of the CARES Act, to potentially provide assistance to bring back many of the jobs that were cut Tuesday.

Parker and Isom said there was broad, bipartisan support for extending more payroll benefits to airlines, but that progress on passing the measure was bogged down.

“... (W)e must prepare for the possibility that our nation’s leadership will not be able to find a way to further support aviation professionals and the service we provide, especially to smaller communities,” they wrote. “If you haven’t already done so, you can let your elected officials know just how important a PSP extension is to you, your families and our economic recovery.”


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