Only 200 American Airlines flight attendants have so far volunteered to take a voluntary severance package out of a total workforce of 28,000 crew, despite efforts by the Dallas Fort Worth-based airline to desperately reduce its payroll expenses. Today, Doug Parker, American’s chief executive described the current period as one of the most volatile and challenging in the company’s history as the airline reported a second-quarter pretax loss of $4.3 billion.
American anticipates an overage of as many as 10,000 flight attendants by October when federal payroll support runs out. Letters warning of potential involuntary furlough have been sent to roughly 37 per cent of American’s total flight attendant workforce putting them on notice that they could laid-off come the fall.
The airline has been offering both voluntary early-out packages for certain eligible employees, as well as extended leaves of absence as ways to reduce the need to lay-off workers. Parker says uptake of the various programs has been high across most areas of the business but very few flight attendants have so far signed up to leave the company early.
If American needs to lay off all 10,000 flight attendants, staffers who joined the airline as far back as April 2002 will be furloughed. The airline has already cut back its planned August schedule because of a renewed slump in travel demand prompted by a surge in COVID-19 cases across some southern and western states.
In contrast, Southwest Airlines revealed earlier this week that 28 per cent of its workforce had either opted to leave the airline altogether or had volunteered for an extended leave of absence. Some 4.400 employees have applied to take an early retirement option, including as much as 33 per cent of Southwest’s flight attendants.
Southwest is also trying to avoid involuntary furloughs – something the airline has never had to do in its history. Chief executive, Gary Kelly shared a pessimistic forecast, however, saying in an internal memo that the impact on future travel demand caused by the spike in Coronavirus cases was of great concern.
Today, American said it aims to reduce capital expenditure by as much as $15 billion in 2020 and has managed to slash its daily cash burn from nearly $100 million in April to around $30 million per day in June. Net bookings, however, remain severely depressed and are currently down 75 – 80 per cent compared to the same period in 2019.
Despite the lack of flight attendants offering to take an early out, a total of 41,000 American staffers have so opted for early retirement, a reduced work schedule or a partially paid leave.
