American Airlines chief executive Doug Parker has warned staffers that the airline will likely have an overage of employees of between 10 to 20 per cent by July 2021 owing to the continued impact of the Corona crisis. Flight attendants are likely to be one of the hardest-hit workgroups Parker warned at an employee Town Hall meeting last week, while pilots may be saved because of the high costs involved in recruiting and training them.
The Dallas Fort Worth-based airline has been encouraging employees to take long periods of leave or early retirement to reduce its headcount but Parker now believes involuntary furloughs are likely unavoidable. “It’s going to be even harder than I thought,” Parker grimly warned in comments first reported by Reuters.
Despite a slight uptick in passenger numbers over the last few weeks, Parker cautioned that “revenue is not coming back as fast as we’d like.” At the start of June, American was slightly more optimistic after reporting it had ‘unparked’ 200 mainly single-aisle aircraft that had been grounded in response to the massive slump in travel demand because of a “positive trend” in future bookings.
At the height of the Corona crisis in April, American Airlines drew down its schedule by over 80 per cent but since then the carrier has added back around 10 per cent of capacity. At its Dallas hub, capacity will run at around 40 per cent in July according to the Association of Professional Flight Attendants (APFA) – an increase of over 13 per cent compared to June.
The latest data from the Transportation Security Administration (TSA) shows passenger numbers across all U.S.-based airlines is currently at around 20 per cent of what they were handling at the same time last year.
By October, American will have around 20 – 30 per cent more staff than it needs. By July 2021, that number is predicted to drop to between 10 – 20 per cent. Parker told staff that any furlough decisions may be based on the July 2021 predictions.
As a condition of accepting a $5.8 billion bailout under the CARES Act, American is barred from implementing any involuntary furloughs until October 1. The airline has already told its Management and Administrative (M&A) workgroup that up to 30 per cent of employees in that department will likely be cut.
A leaked memo warned M&A staffers that American “must plan for operating a smaller airline for the foreseeable future”.
“It really makes zero sense to go furlough a pilot in October if you’re going to need that pilot again in July,” Parker is reported to have said in justifying his decision to possibly furlough fewer pilots than flight attendants or other employees.
The Association of Professional Flight Attendants (APFA) which represents American’s FA’s has called on the federal government to extend the CARES Act with a second airline bailout. The call has been echoed by a coalition of unions including the separate CWA affiliated Association of Flight Attendants who represent FA’s at 20 airlines including United and would put involuntary furloughs on hold for another six months.
