American Airlines plans to shrink management and support staff roles by 30 per cent in response to the Corona crisis according to an internal memo sent to staffers on Wednesday detailing the job losses. American told affected employees that despite a multi-billion dollar federal assistance programme, the airline would be forced to reduce its cost structure in the medium and longterm in order to weather the COVID-19 pandemic.
Like many airlines, the Dallas Fort Worth-based carrier said that meant cutting its most significant expense – “the cost of compensation and benefits”. The letter grimly warned staffers: “…we must plan for operating a smaller airline for the foreseeable future”.
Despite talk of a small recovery being witnessed in the aviation industry, passenger numbers are still way down and much of American’s aircraft fleet remains grounded. The number of passengers that passed through TSA security checkpoints at America’s airports in a day hit nearly 14 per cent of last year’s numbers on Monday but has since dropped back down to less than 11 per cent.
American doesn’t anticipate those numbers levelling off for at at least two to three years and as a result expects to be flying around 100 fewer, mostly widebody, aircraft next summer. “…running a smaller airline means we will need a management and support staff team that is roughly 30% leaner,” yesterday’s memo explained.
Employees have been given a simple choice: Voluntarily choose an ‘early out’ or take a chance and risk being made redundant. Workers will only have until June 10 to opt for the early-out programme and ‘involuntary separations’ will be communicated at some point in July if enough people don’t voluntary leave the airline.
American will be unable to make anyone redundant until October 1 because of its commitment for receiving $5.8 billion as part of the Trump administration’s Coronavirus Aid, Relief and Economic Security (CARES) Act.
While this is the first time American has announced the possibility of forced redundancies as a result of the Coronavirus outbreak, this announcement is unlikely to be the last and soon the focus will fall on frontline employees:
“Once we ensure we have the right size and structure in place for our MSS team, we can begin the work for our frontline team, recognizing that we will be a smaller airline, with fewer routes and fewer flights. While we are still working through the details of our future schedule, we plan to open a new voluntary leave and early-out program for frontline team members in June.”
The airline cautioned that its goal was to avoid involuntary redundancies through a combination of early outs and unpaid leave of absence but reminded staffers: “This is a goal, though, not a commitment, and a stretch goal at that”.
