American Airlines signals local flight attendant layoffs as it agrees to U.S. bailout
Amid a meager recovery in U.S. air travel, American Airlines warned employees this week that it now has between 7,000 and 8,000 more flight attendants than it needs. As a result, many of these workers will face layoffs — including ones based in Miami.
In a letter dated June 30, the company said that shifts in its network mean “notable” changes to the ranks of attendants based at Miami International Airport. American is the area’s largest carrier, employing approximately 13,500 locally.
In April, American reported a quarterly loss of $2.2 billion, and has scaled back service dramatically. In May, it announced a 30% cut in its ranks of management and staff.
The company also said it expects reductions at its Latin American bases.
“Every part of our company is going to need to operate more efficiently going forward, given the massive financial losses it is experiencing and the long-term impact this pandemic will have on our debt level,” wrote Jill Surdek, senior vice president for flight service.
Against this backdrop, American, along with at least four other U.S. airlines including Miramar-based Spirit Airlines, will receive portions of $25 billion in federal loans that came as part of the federal CARES Act to address the economic fallout from the coronavirus. As part of the agreement, American cannot initiate layoffs until Oct. 1.
The Treasury Department, which made the announcement Thursday, has not disclosed the amounts and terms of the loans. In exchange for the funds, airlines are required to put up equity, warrants, or senior debt to compensate taxpayers, CNBC reported. The other airlines are Hawaiian Airlines, Sky West Airlines, and privately held Frontier Airlines, CNBC said.
Spirit Airlines remains in the midst of a $250 million move for 1,000 of its employees from Miramar to Dania Beach. Last month, Spirit forecast it would be back to about 70% of capacity by July compared with the same period last year; it had previously scaled down operations to less than 10% of pre-pandemic capacity in May.
Shares in American Airlines closed down 2.4% to $12.50; year to date, shares are off 57%. Spirit closed 1.9% in Thursday trading to $17.40; its shares are also down 57% year to date.
