American Airlines will have more than 20,000 front-line employees this autumn than it needs to operate its reduced flying schedule, executives said on Thursday.
Doug Parker, chief executive, and Robert Isom, president, said in a memo to employees that, given reduced customer traffic, the Fort Worth, Texas, airline anticipated that it would have 20 to 30 per cent more pilots, flight attendants, airport agents, mechanics and baggage handlers than it needs. On Wednesday the airline decided to abandon 19 international routes from six hubs.
“To be clear, this doesn’t mean 20,000 of our team members will be furloughed in October, it simply means we still have work to do to right-size our team for the airline we will operate,” they said. “We are committed to resetting the airline using a different playbook than the one of past crises where last-in, first-out furloughs were the expected result.”
The US airline industry continues to reel from the coronavirus pandemic. Demand has improved slightly, and American told customers on Tuesday to expect fully booked aeroplanes.
But passengers and cash remain a fraction of last year’s totals. American averaged $4.2bn in cash receipts per month in the second quarter of 2019. This year, the airline received $11m in April, $358m in May and $1bn in June.
Of the 20,000 workers, between 7,000 and 8,000 were flight attendants, said Paul Hartshorn, a spokesman for the Association of Professional Flight Attendants, which represents American’s 27,000 flight attendants. The union and management are in talks on Thursday to find a way to limit potential furloughs by developing attractive leave and early retirement packages.
“Everyone is pretty stunned,” said a flight attendant who asked not to be identified. “We all kind of knew it was coming, but we didn’t know what the exact number was going to be.”
American has about 80,000 front-line workers at its flagship carrier and approximately 17,000 in management. The company said in May it would reduce management ranks by approximately 5,000 employees. The entire company, including regional carriers, employs 131,500 people.
As has been expected since April, Mr Parker and Mr Isom said American signed an agreement with the US Treasury to receive a $4.75bn loan from the second tranche of airline aid contained in the US Cares Act. The loan and the $4.5bn capital raise last week brings the company’s cash balance to $15bn.
American’s unions have floated plans for continued government aid to the airline industry. The Allied Pilots Association, representing 15,000 American pilots, encouraged the government to purchase middle seats, to guarantee revenue and reassure potential passengers who want to socially distance on board. The flight attendant union wants to see the first tranche of government aid, the payroll support programme, continued through to March 31.
“To burden the [unemployment] system [on] October 1 with literally over hundreds of thousands of aviation workers who will be hitting the streets doesn’t seem like the solution,” Mr Hartshorn said.