An airline employee walks past empty American Airlines check-in terminals at Ronald Reagan Washington National Airport in Arlington, Virginia on May 12, 2020.
American Airlines announced on Thursday that more than 20,000 employees will not be needed for the reduced autumn flight schedule as the airline and its competitors face weak demand for air travel during the coronavirus pandemic.
The Fort Worth, Texas-based airline and other U.S. airlines are calling on their employees to take over or take early retirement options to reduce the number of employees before taking involuntary measures such as layoffs.
U.S. airlines are prohibited from firing or lowering their employees' wages until September 30th. The $ 25 billion government payroll support is said to mitigate the virus' impact on its business. American had 133,700 employees at the end of last year.
"We currently expect 20 to 30% – or more than 20,000 – more team members to be on the payroll than we need to meet our fall schedule," said CEO Doug Parker and President Robert Isom in an employee note. "To put it bluntly, it doesn't mean that 20,000 of our team members will be on vacation in October. It simply means that we still have to work on properly dimensioning our team for the airline we operate."
American and its competitors have increased liquidity and reduced costs as demand remains a fraction of the 2019 level even for the summer high season.
American and four other airlines have signed $ 25 billion in federal loan agreements to help them weather the crisis, the Treasury said on Thursday. American expects to close the loan in the third quarter.
In the depths of the April demand crisis, Americans had revenues of approximately $ 11 million, which rose to $ 358 million in May and to over $ 1 billion in June.
"Although this improvement is encouraging, it will be compared to an average of $ 4.2 billion per month over the same period in 2019, so we still have a long way to go," wrote Parker and Isom.
The airline burned less than $ 35 million a day at the end of June, compared to $ 100 million a day in April.
American expects international travel demand to remain subdued next year. Earlier this week, it was announced that its international long-haul flight schedule in summer 2021 would be 25% below the 2019 season offer and 19 routes will be cut.
The airline also plans to reduce the cabin crew for international and transcontinental routes and to downsize some of its cabin crew and junk bases in the Raleigh-Durham, North Carolina, and St. Louis area.
For its part, United Airlines also encourages employees to make acquisitions, telling employees this week that they will accept applications by July 15 and that their last working day, if their applications are accepted, will be July 29.
"We expect that this will be the last extension (voluntary separation program) and that there will be no further voluntary offers," the airline said in a message to employees. "As we announced in this June 15 message, we are likely to notify some employees this month under the Employee Adjustment and Retraining Act (WARN) indicating potential involuntary vacation days that will take effect on October 1. "
Delta Air Lines announced last week that more than 2,500 pilots would receive WARN Act notices of possible vacation days earlier this month.
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