American Airlines started to send out redundancy warning letters on Wednesday to around 25,000 employees who are at risk of being laid-off on October 1 when federal payroll support comes to an end. In an internal memo, the Dallas Forth Worth-based airline said it believes it will have an overage of at least 20,000 employees come the fall but hopes to reduce the number of forced redundancies through voluntary measures including a new early-out program and extended leave of absence option.
Worst affected by the potential lay-offs are flight attendants who could see their workgroup shrink by as much as 37 per cent according to figures released by American last night. Official notices under the Worker Adjustment and Retraining Notification (WARN) letter will be sent to nearly 10,000 flight attendants – meaning staffers who joined the airline as far back as April 2002 are at risk of being furloughed.
Also hit will be Dispatch workers where 36 per cent of the workforce faces redundancy and fleet service workers who could witness a 26 per cent reduction in numbers. Around 2,500 pilots could be axed, while around 2,900 passenger service agents have also been warned about potential redundancy.
“We hate taking this step, as we know the impact it has on our hardworking team members,” the airline told staffers in Wednesday’s leaked note.
“Our passenger revenues in June, while we believe are better than others in the industry, were more than 80% lower than June 2019. And with infection rates increasing and several states reestablishing quarantine restrictions, demand for air travel is slowing again.”
American says it hopes to “significantly” reduce the number of furloughs through new voluntary measures including early-out’s and an extended leave program which will give workers the option of taking between 15 and 24 months in leave with continued non-rev travel benefits and partial pay for certain eligible employees.
An improved early-out program will offer more money and health benefits for employees with more than 10-years service. Workers with less than 10-years service will be offered continued non-rev benefits for two years, as well as six months of health care coverage.
“We know American will be smaller going forward and we must right-size all aspects of our airline to adjust to that new reality,” the memo from American’s chief executive, Doug Parker continued.
Parker also confirmed for the first time that American is supporting a union-led call for an extension of federal payroll support under the CARES Act. American received $5.8 billion in grants and loans to secure jobs through to the end of September. Any extension would potentially keep those jobs safe through April 2021 when “there would most certainly be more demand for air travel, and along with that demand, much less need for involuntary furloughs throughout the industry”.
While American supports the initiative, Parker urged employees to work with their unions to pressure Congress rather than offering to directly lobby lawmakers.
Last week, United Airlines offered the most pessimistic assessment of potential job losses, telling employees that as many as 36,000 workers could be laid-off. The Association of Flight Attendants (AFA-CWA) described the estimate as a “massive overreach” and demanded the airline look at alternatives to involuntary furloughs.
