American Airlines has this week become the latest major US airline to warn of layoffs as of October 1…
American could furlough up to 25K employees
The funding that US airlines received through the CARES Act precludes them from laying off any employees through September 30, but all bets are off as of October 1. It’s becoming increasingly clear that we should expect lots of layoffs as of then, assuming the government doesn’t provide more payroll support.
This week American Airlines sent out a letter informing employees of upcoming involuntary furloughs. The company makes it clear that around 25,000 American Airlines frontline employees are being notified that they may be subjected to a furlough come October 1, under the Worker Adjustment and Retraining Notification (WARN) Act.
The letter notes that when the CARES Act was signed in March, American had the stated goal of avoiding furloughs, because the company hoped that demand for air travel would steadily rebound by October 1, as the impact of coronavirus dissipated.
That hasn’t happened, though — revenue in June 2020 was down by more than 80% compared to June 2019. Furthermore, with infection rates increasing in several states, and new quarantine restrictions being introduced, demand for air travel is slowing again.
As a result of all of this, the company anticipates having more than 20,000 surplus employees this fall.
While 25,000 WARN notices will be issued, the hope is that the actual number of furloughs will be reduced through a combination of voluntary extended leave and early-out programs:
- American is offering 15, 18, and 24 month extended leave programs, that provide continued medical coverage, non-rev travel privileges, and partial pay for some employees
- American is offering an early-out program for employees with at least 10 years at the company, including a retiree health reimbursement arrangement and positive space travel
American Airlines issued WARN notices to 25K employees
WARN notice breakdown by workgroup
Here’s how many employees in each workgroup received a WARN notice, and what percent of each workgroup that represents:
- 9,950 flight attendants, representing 37% of the workgroup
- 4,500 fleet service employees, representing 26% of the workgroup
- 3,200 maintenance employees, representing 22% of the workgroup
- 2,900 passenger service employees, representing 30% of the workgroup
- 2,500 pilots, representing 18% of the workgroup
- 1,000 reservations employees, representing 23% of the workgroup
- 175 dispatch employees, representing 36% of the workgroup
- 50 flight crew training instructors, representing 15% of the workgroup
- 10 flight simulator engineers, representing 7% of the workgroup
18% of pilots received WARN notices
American is still hoping for more government aid
The letter to employees also notes the potential for the government to extend its Payroll Support Program by a further six months, which would delay any layoffs. The airline hopes that demand would recover more by next spring, meaning fewer layoffs would be needed.
Employees are encouraged to work with unions to make their voices heard in favor of further government support:
“It’s worth noting that each of our unions has expressed support for legislation that would extend the Payroll Support Program funding for six months in light of the much longer impact of the pandemic than was anticipated when the CARES Act was enacted. 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.
This is a union-led initiative across our industry, but American is supportive of any legislation that would protect our team’s jobs during these extraordinary times. If you are interested in supporting these legislative efforts, we recommend that you work with your union leaders to ensure your voice is heard. That an extension of the Payroll Support Program is being considered illustrates the incredibly important work all of you do every day across our country and globe. Notably each direct airline job supports 13 additional jobs that support our aviation infrastructure and industry.”
Could the government extend support for airlines?
American Airlines has issued around 25,000 WARN notices, as the company anticipates having to furlough employees as of October 1. These numbers are higher than were hoped a few months ago, but then again, the recovery of air travel is slowing down.
American Airlines has issued WARN notices to significantly fewer employees than United Airlines — despite United having a smaller workforce, the company issued notices to 36,000 employees, representing 40% of its workforce.
The reason for this is likely that American has run the most aggressive schedule of major US airlines during the pandemic, and we can expect that to continue.
It’s also worth keeping in mind that WARN notices won’t necessarily directly reflect how many employees will actually be furloughed come October.
I’ll be curious to see if the government pledges any further support. I feel bad for all the airline employees facing so much uncertainty right now (as is the case with so many industries, for that matter).
The US Govt. should have allowed furloughing employees and transferred the CARE fund directly to the affected employees. Would have lasted longer time without the middleman cut.
Insanity: doing the same thing over and over again and expecting different results.
If you care about these employees, keep traveling. That’s the only real solution to preserving jobs.
Don’t depend on government to replace real economic activity.
Keep flying, continue to eat out, and stimulate the economy.
Per our contract we'll have up to five years non-revenue flight benefits I'll be certain to wave from 1st class....
The thing with AA is that so far out of all the big 3 they have the most aggressive and progressive plan to endure and win. Sad that so many may be affected jobwise, but, even with them being debt heavy my money is on American to come out of this mess the strongest. United is doing it all wrong by retreating. While Delta seems to be playing it safe. The pandemic has them all...
The thing with AA is that so far out of all the big 3 they have the most aggressive and progressive plan to endure and win. Sad that so many may be affected jobwise, but, even with them being debt heavy my money is on American to come out of this mess the strongest. United is doing it all wrong by retreating. While Delta seems to be playing it safe. The pandemic has them all on level ground and it seems that the AA team is going for the kill! Their employees themselves will tell you. The fear and excitement is there.
@The Original Donna,
Very good. And funny!
Also, yes the title is click baity. They issued warn notices and it depends on how many take the early outs, and other voluntary programs. It will likely not be 25,000 as that's an estimation if no one participates in their voluntary programs.
That being said, this is a blog and they need to get attention just like any other business so I don't fault them at all for the title.
Even if an AA FA is forloughed they still will have flight benefits for at least two years I believe. It is written in their contract, so that is very wishful thinking on your part.
Without wishing to rehash the arguments about non-rev travel - Have a degree of compassion. Be nice, be pleasant and stop wanting other people to suffer just because they have access to something you apparently don't.
Did you by any chance vote for Trump?
It's people like you that make the world a difficult place to live. You should combat those demons within that allow you to make such hateful comments. What God-fearing person would find excitement in the possible misery/demise of others? What kind of person would want others to be unable to provide for their families? Clearly that's you, which would suggest you have some deep rooted miserable issues of your own that should...
It's people like you that make the world a difficult place to live. You should combat those demons within that allow you to make such hateful comments. What God-fearing person would find excitement in the possible misery/demise of others? What kind of person would want others to be unable to provide for their families? Clearly that's you, which would suggest you have some deep rooted miserable issues of your own that should be addressed immediately. If you haven't figured it out by now, I am an AA employee whom asked for none of this. I have been reduced to fifteen hours a week and simply wish to return to work. Your hatred is disgusting and you should be mindful of the negative energy you put out into the universe as more times than not it finds it's way back to you. Now in the event a layoff befalls me I'd have you know my non-rev benefits will remain intact for up to five years per our contract. So I'll remind myself to turn and wave from first class as you may very well be sitting behind me. Enjoy the remainder of your day & be Blessed...
Hopefully sooner rather than later. No reason for government to subsidize their pay for them to sit at home while others are on unemployment. Fingers crossed that non-rev benefits get nixed too - they’re filling up first class right now, making it the least socially distanced cabin in the plane.
Although it’s rare for Americans to agree on anything these days, maybe we can all stipulate that 2020 will go down as a really bad year, especially for those who have lost friends and family to the virus. We can try to politicize this and blame each other but let’s hope we are seeing the worst at the moment and that an effective vaccine is coming quickly, and we will all make it into 2021...
Although it’s rare for Americans to agree on anything these days, maybe we can all stipulate that 2020 will go down as a really bad year, especially for those who have lost friends and family to the virus. We can try to politicize this and blame each other but let’s hope we are seeing the worst at the moment and that an effective vaccine is coming quickly, and we will all make it into 2021 and those who have lost their jobs will be reinstated, those who are suffering with the virus will fully recover and we on OMAAT can get back to arguing over which credit card offers the best deal again.
With hubs at MIA, DFW and PHX, can we say they have a red-state governor problem? Then there's JFK and ORD, where travelers from infected states are being quarantined. LAX is going back into lockdown, so the situation there might improve in 60 days, but it has a lot of international flights and what countries in Asia and Europe want American visitors?
But if you had bought AAL on May 14, you'd still be ahead by 50%.
I hope all these employees will spend a good deal of their extra time thinking about who they want in the Oval Office come Nov and how the country got itself into this hot mess.
They literally sent out 25,000 notices of upcoming layoffs. They’re not notices of the employee being laid off, but notices that layoffs are imminent/happening. You read something that the title did not say. I’ll call out clickbait when I see it. This was not clickbait.
@Ryan - I don't think the blogger is clueless. The actual words of the article are quite accurate; the headline may be a little misleading to get you to click on it.
Clueless Bloggers...these are WARN letters... they are NOT furloughs. Please stop using titles that create a false understanding. AA will not be laying off 25,000 people.
Jetblue/AA code sharing
We had a small window to get things under control. The economic damage due to our (lack of) pandemic response will come into sharper focus over the next two to three months.
Together, the “big three” could let go 75,000-80,000 employees. For perspective, the coal industry, which the administration campaigned to save, employs between 50,000-60,000 in total.
And a codeshare with Jetblue focused on NYC!