American Airlines executives warned employees late Wednesday that the airline will have to lay off as many as 25,000 front-line workers this fall because travel has not rebounded from the coronavirus crisis as they had hoped.
The job cuts, which cover unionized employees including pilots, flight attendants, mechanics and airport workers, represent nearly 30% of the company's 85,000 front-line workers in its U.S. mainline operation. American previously cut 30% of its corporate staff, or 5,000 employees.
In a memo to employees, American CEO Doug Parker and President Robert Isom said the goal when the payroll protection provisions of the federal CARES Act were signed in March was to buy time for travel to rebound so no layoffs were needed when the program ends Oct. 1.
"That unfortunately has not been the case,'' they said.
American's revenue in June was 80% lower than June 2019, the executives said, and travel demand is slowing again after an uptick, due to a spike in COVID-19 infections and new travel restrictions and quarantines.
The bottom line: The airline expects to have more than 20,000 more workers on its payroll than it needs this fall as it shrinks its schedule to reflect the reality of depressed travel demand for the foreseeable future.
The airline is sending notices to 25,000 workers, however, because the federal Worker Adjustment and Retraining Notification Act (WARN) requires companies with mass job cuts looming to include employees who may be transferred, in addition to those facing layoffs. In American's case, the airline said its airport and tech operations teams face that possibility.
Flight attendants face the biggest cuts, with notices going out to nearly 10,000 American flight attendants, or 37%.
Parker and Isom said they hope the final number of layoffs can be reduced "significantly'' by voluntary leave and early-out programs it announced Wednesday.
"Although this is a day none of us wanted to see, we have created new, generous programs intended to help offset as many frontline furloughs as possible,'' the executives said. "We encourage everyone to carefully consider these enhanced voluntary options."
Another factor that could change the ultimate number: an extension of the payroll protection provisions. Airline unions have been pushing hard for it in Washington, but airline executives have not been counting on it. American executives said only that they support any legislation that would "protect our team's jobs during these extraordinary times.''
'A gut punch:' United to lay off up to 36,000 workers
Delta Air Lines is an outlier, at least so far, thanks to wide acceptance of the airline's voluntary leave and exit programs. The airline's CEO, Ed Bastian, said Tuesday that Delta might not have to lay off any workers. He said 17,000, or 20%, of the airline's workers accepted voluntary early retirement.
"I’m optimistic if we do have a furlough, it’s going to be relatively minimal numbers,'' he said on CNBC.
This article originally appeared on USA TODAY: American Airlines to lay off as many as 25,000 amid travel crisis