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American Airlines says it will furlough 19,000 workers unless Congress agrees on more COVID-19 relief

Business Insider logo Business Insider 8/25/2020 dslotnick@businessinsider.com (David Slotnick)
a group of people standing around a plane: American Airlines will furlough up to 19,000 employees on October 1, the airline said in a memo to staff on Tuesday, unless an extension of the CARES Act's payroll support program is passed before then. Joe Raedle/Getty Images © Joe Raedle/Getty Images American Airlines will furlough up to 19,000 employees on October 1, the airline said in a memo to staff on Tuesday, unless an extension of the CARES Act's payroll support program is passed before then. Joe Raedle/Getty Images
  • American Airlines will furlough and lay off 19,000 employees on October 1, the airline said in a memo on Tuesday.
  • The furloughs come as the coronavirus pandemic continues to severely depress air travel demand.
  • Including buyouts and early retirements, American will shrink by nearly 40,000 employees compared to pre-pandemic levels.
  • Visit Business Insider's homepage for more stories.

American Airlines will furlough up to 19,000 employees on October 1, the airline said in a memo to staff on Tuesday, unless Congress extends the CARES Act's payroll support program.

"Today is the hardest message we have had to share so far," CEO Doug Parker and airline president Robert Isom wrote in a memo to employees, seen by Business Insider.

The furloughs include 17,500 front-line employees, as well as 1,500 management and support workers, whose furloughs were announced in late June. About 1,600 pilots, 8,100 flight attendants, and 2,225 fleet service specialists are included in the front-line furloughs.

Airlines have been hit particularly hard by COVID-19, with travel demand collapsing early in the pandemic and making only modest recoveries since, hampered by summer spikes across the US.

Are you an employee at American or another airline? Contact this reporter with tips, thoughts, or other feedback at dslotnick@businessinsider.com.

American received more than $5.8 billion in payroll support through the CARES Act. The airline agreed not to furlough or cut pay for workers until October 1 in exchange for the aid.

"The only problem with the legislation is that when it was enacted in March, it was assumed that by Sept. 30, the virus would be under control and demand for air travel would have returned," Parker and Isom wrote. "That is obviously not the case."


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The airline needs to shrink by 40,000 employees compared to its size entering the pandemic, Parker and Isom wrote. About 12,500 employees have taken early retirement or other buyout packages, while a further 11,000 have applied for voluntary unpaid leaves of absence in October.

American and and other airlines, which expect to emerge from the pandemic significantly smaller, have urged employees to take such buyouts or voluntary unpaid leave programs.

American plans to fly about 50% of 2019 levels in the fourth quarter, Parker and Isom wrote, with international flying at just 25% the previous year.

"So, as Sept. 30 approaches, we have announced reductions in service, including the complete elimination of service to certain markets in early October, and today we are announcing the related reductions in our workforce," the pair wrote.

The furloughs will be distributed among work groups based on demand — for instance, work groups with a higher emphasis on international travel will likely be more heavily impacted.

The memo added that furloughs may be avoided if the CARES Act's payroll support program is extended.

"Led by your labor unions, with the support of the industry, we have generated enormous bipartisan support for such an extension," Parker and Isom wrote. "But, despite this broad bipartisan support, a PSP extension is tied up in a larger COVID-19 relief package, which our elected officials haven't yet been able to negotiate."

American also announced last week that it would cut unprofitable routes that it was operating in order to comply with CARES Act terms, barring an extension of the support.

Delta Air Lines announced Monday that more than 1,900 pilots will be furloughed. It has not announced numbers of other work groups.

Are you an employee at American or another airline? Contact this reporter with tips, thoughts, or other feedback at dslotnick@businessinsider.com.

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