Airlines notifies 13,000 employees to prepare for layoffs as survival fund shrinks

*The company says it will need to make cuts when federal aid runs out in March

Alexander Davis | ConsumerConnect

In case the Labour unions are unable to raise more emergency funding from the US Federal Government, American Airlines (American) has informed its employees that once the current Federal aid it has been living on expires March 31, 2021, as many as 13,000 workers will likely be furloughed.

The $15 billion Payroll Support Programme (PSP) package the Congress approved for domestic air carriers late 2020 required airlines to recall all employees they furloughed in the fall and maintain payroll through March 31 this year, says agency report.

American’s peer United Airlines also sent layoff warnings to 14,000 staff members recently.

Even pilots are affected in the process, as the furlough notices covers every aspect of American’s workforce.

An American Airlines securities filing disclosed these include 4,245 of its flight attendants, 3,145 fleet service workers, 1,850 pilots, 1,420 maintenance workers, 1,205 in passenger service, 100 dispatchers, and 40 flight crew training and simulator pilot instructors.

American is the only major US carrier to furlough pilots.

Delta, United and Jetblue previously cut deals with pilot unions that kept the pilots’ jobs in place in exchange for reduced flying or pay.

However, Southwest also has told its pilots that they run the risk of being furloughed in March or April 2021.

In its filing, American also announced that it will open a voluntary early-out programme (VEOP) and a long-term voluntary leave of absence (VLOA) programme for the company’s US-based team members, but not its pilots, report stated.

It was learnt the benefits offered through those programmes include everything from non-revenue travel privileges and partial pay up to $150,000 in a Retiree Health Reimbursement Arrangement.

Meanwhile, the Allied Pilots Association (APA), American Airlines pilots’ union was reportedly thrown off by American’s move to furlough pilots.

APA brass wrote in response to American’s announcement, stating “although we recognise (American Airlines) CEO Doug Parker’s efforts when he joined APA on Capitol Hill for PSP, today’s news does come with some head-scratching.

“While perhaps not unexpected due to near-term passenger demand, the announcement seems to contradict recent comments by President Robert Isom, who said during last week’s earnings call that, due to retirements, American would ‘be hiring pilots in the not-too-distant future.”

But American’s CEO Parker and President Robert Isom wrote in a note to staff that with constantly changing guidance and rules for travellers regarding masks, international travel, and COVID-19 tests, the airline industry probably suffers more pandemic-led economic turbulence than any other business sector.

The duo said: “The vaccine is not being distributed as quickly as any of us believed, and new restrictions on international travel that require customers to have a negative COVID-19 test have dampened demand.

“Please know that we will get through this period and to more stable ground — that is certain. And, we will continue to fight in every way possible to get there as soon as we can.”

According to Parker and Isom, “until demand returns and we can provide permanent job stability, we owe you transparency.

“That is what we can offer today, and what we will continue to provide. Thank you for all you continue to do for each other, our customers and our airline.”

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