American Airlines plans to layoff 19,000 employees in October as the federal aid expires.
The government provided funding to the airline industry to prevent massive layoffs which were to expire in September. Under the terms of this funding, airlines were not to cut jobs.
“We have come to you many times throughout the pandemic, often with sobering updates on a world, none of us could have imagined,” American Airlines CEO Doug Parker and its president Robert Isom wrote in a staff statement announcing the cuts. “Today is the hardest message we have had to share so far — the announcement of involuntary staffing reductions effective Oct. 1.”
There are more than 140,000 employees of American Airlines.
However, last month the company issued warning notices to about 25,000 of its employees about possible layoffs.
The airline industry was at a halt due to the coronavirus pandemic. And the number of air travelers this year is half of what it was during this same period last year.
Hoping For Extension of Federal Aid
Company executives said the only hope for avoiding the layoffs was an extension of federal funding.
“The one possibility of avoiding these involuntary reductions on October 1 is a clean extension,” one of the executives said.
Negotiations between Democrats and Republicans in Congress to potentially extend the funding broke down last week.
The Pandemic Effect
” PPP is about to expire, and Congress is not prepared to provide any additional help to small businesses on the brink of collapse,” John Arensmeyer, founder and CEO of Small Business Majority, a small business advocacy group said. “There are a number of small businesses in our network that cannot survive even one more month at the current rate of business without more help.”
American Airlines is trying to reduce job cuts during the pandemic. By asking employees to take buyouts, encouraging early retirement, and unpaid or partially paid leaves.
However, there are more than 12,500 people that are not working for American Airlines anymore. Whereas 11,000 will be leaving the company starting from October.
Surviving The Pandemic
To manage the expenses American Airlines is booking flights to full capacity. The airline is ending the restriction of social distancing in all its flights. Whereas, the United States sees a surge in new cases of the coronavirus.
The airline’s step of not following social distancing is similar to that of the United Airlines policy. But differs from those rivals that are still booking fewer seats to keep space between passengers to minimize the risk of catching the virus.