American Airlines Laying Off Employees, Reducing Use Of Contractors, Even If They Get Bailout

The novel coronavirus has taken a huge toll on the nation’s airlines. It’s also taken a toll on the employees. Flight attendants can wear face masks but airlines are considered essential services, not subject to social distancing rules. Front line employees come into contact with customers throughout the day, and flight crew travel to and from the most affected areas.

According to an American Airlines employee Facebook group (so this is not confirmed), they’ve had several coronavirus positives.

Today, we were notified by AA PHL operations that an AA PHL employee tested positive. 3 JFK based FAs are reporting they tested positive after flying to Madrid, London & Milan earlier this month

…At least 2 CLT based AA FAs are in Charlotte area hospitals. One tested positive and is in ICU. The other is awaiting a test to be located but has all the symptoms

American, for its part, confirms the Philadelphia positive in an internal communication:

American wants flight attendants to take unpaid leave (pilots get at least half pay if they opt for leave). I’m not sure anyone wants to be without a job right now, even when there are health risks.

After all even if the airline gets its requested payroll bailout (the airline industry on Saturday asked for the government to pick up full pay for everyone from management on down through August, promising no layoffs only through.. August] they are still forcing layoffs.

While call volumes are at their highest levels ever for sustained periods of time, with customers calling to cancel flight itineraries, American is still closing its home-based reservations centers leaving most of those reservations agents without a job. A government bailout won’t project those jobs.

A bailout also won’t protect the jobs of flight catering staff at companies like Sky Chefs and Gate Gourmet, contract cleaners, or employees of any contractor not employed directly by the airline.

In Philadelphia, for instance, American is consolidating the gates it is using in order to reduce use of contractor services and save costs.

That’s understandable, of course, but the bailout they’re asking for doesn’t protect these workers’ jobs at all – while it does protect the jobs of the airline’s management.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Gary I hope you don’t have to make the decision my company and my wife has to make right now. Management will be laid off too so don’t kid yourself. These same difficult decision are being made across the globe at airlines and all other businesses.

    We get it, you hate AA but at a time like this they are no different than the rest of us. We need to look for positives during this time, like the fact that they are flying empty passenger jet with relief aid and I don’t see the other US airlines doing that.

    We are all trying to do the best we can do, make the right decision for our businesses, our employees, our families and our country. It is not rational to think the spending billions will save all the jobs, the demand for air travel will drop by 30 – 40% and will take several years to come back. . .just like 9/11. There will be layoffs, furloughs and pay cuts, especially in the unskilled and hospitality industries regardless of what the idiots in Congress do.

    We are all making hard decisions for the greater good, it will hurt for a while, but we will get through it, so that we can get our folks back to work and the country/world moving forward.

    Try to find the good this next week. . .it is the change we all need right now.

  2. Gary… once again. Stick to the reviews of what wine is served in 1st class.
    1. The point of the bailout is to save the airlines , not immediately the contractors. No one ever said they would keep their jobs.
    2. In the long run , the contractors will have jobs IF the airlines bounce back. If the airlines don’t bounce back those contractors have 0% chance of keeping their jobs.

    I am an airline employee and I have
    worked my entire life to get where I am. But as far as I’m concerned , if we do not restart the economy and get it back going … I won’t have a job. If there is no demand for air travel , there will not be jobs. If airlines do not get bailed out , there will be absolutely no way for them to support and rebound if and when demand recovers. How do you keep pilots ready to go if they are furloughed and require recurrent training. I know we have about 1 sin for every 350 pilots. You figure that out !

    Either way, stay away from these stories. They spread false negativity and you are speculating on things you are not an expert on.

  3. “You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.” Rahm Emanuel

    I think the senior management of the airlines are following the same philosophy. Remember when sanctimonious Parker said he was doing everything for American Airlines employees. Hard to stomach.

    Everyone else, except for the executive suite, is going to take a bath. As Ryan says, if there is no flying, airline employees will not have a job. But I do not consider the Airline executive suite to be good faith actors.

  4. @Ryan – people don’t understand the extent to which contractors are used – you are mistaken that “point of the bailout is to save the airlines , not immediately the contractors.” It is to save ‘jobs’ so understanding the job losses that will happen ANYWAY (or without an additional separate bailout) is important, even if you don’t want people to know it.

    This claim you make is outright false, “If airlines do not get bailed out , there will be absolutely no way for them to support and rebound if and when demand recovers.”

    Without a bailout airlines may face Chapter 11 (though American has said that’s not the case). Each of the major airlines has experience flying through bankruptcy. And the capital markets remain open to airlines, each of United/Delta/American has raised new 10-figure liquidity amounts in the past two weeks.

    I have written earlier this morning that pilots will be challenging as far as being kept current so a return to service after a full shut down would not be immediate. However lack of a bailout is not the same as full shut down.

  5. Based on the first two comments above I thank God every day that I never worked in “corporate America”.

    Bail out the top with money, the bottom get’s thrown out -the American way. Protect “my” job protect “my” company, don’t worry about them – people at the bottom will be there whenever I snap my fingers.

  6. This blog was better when it wasn’t political.

    Gary your headlines are insufferable. Get overself and leave your politics out of this.

  7. I’m a capitalist all the way, but the airlines are asking for a huge amount of my money as well as that of every American who pays taxes. It’s not unreasonable that there be lots of strings attached to that money, especially since they, along with many American corporations, did not use the tax cut money for invest in their businesses as they said they would in the runup to legislation but for stock buybacks and the like. (IMHO, there’s nothing wrong with stock buybacks per se, but to overleverage your company so you can’t survive an economic slowdown is inexcusable).

  8. Als – Get a life, we all work in corporate America. If it wasn’t for the corporations you liberals bleeding harts won’t have ANY money. Grow up!

  9. It’s not that Gary hates AA. We ALL hate AA.

    I’d like to see management and the board left penniless. No options, no shares, no salary, no golden parachutes, no savings, no retirement, no future in the airline industry, nothing. Let their lives end in misery.

  10. Why wouldn’t the Dems agree to Trump’s proposal weeks ago to temporarily suspend payroll taxes? Just because he wanted it? That seems a much more sensible way to protect jobs, without playing favorites. It’s silly to expect that a corporation will keep completely unnecessary employees just because the government is giving them money.

    Giving corporations money to do nothing is not smart, neither is paying individuals money to do nothing. So in that sense most of the money spent is a waste. But now Dems are holding relief bill hostage so they can get their usual laundry list of leftist pet projects. Shameless.

  11. Airlines made the big mistake of trying to pay their employees during the COVID-19 shutdown and they asked the government for help in doing so. These airlines have plenty of cash to ride out the shutdown to make their loan and lease payments and store and maintain their aircraft. They don’t have enough cash to pay their employees during the indefinite shutdown of international and most domestic travel. Because of the false narrative pushed by the media, anti capitalists and politicians, they will only receive help to pay their employees during the shutdown with strings attached that will cripple their ability to return to profitability and soundness when this pandemic finally goes away. Airlines should just say no and lay off their employees. No revenue coming in means no jobs. It’s not the fault of the airlines and not the fault of buybacks that if not done still would mean not enough money to pay their employees for doing no work. Airlines have a responsibility to their shareholders to preserve capital and make the best decisions for shareholders going forward. Shareholders risk their capital while employees put nothing on the line and walk away having earned a salary and benefits for their time of employment and unemployment checks.

  12. Can’t help but think that AA management has paid shills to post comments all over the web. I’ve been seeing such ridiculous praise of airline management in comments on several blogs. Seems unlikely. Commenters, care to disclose who you’re working for?

  13. @Tom …

    Your over-the-top hate for AA is way out of line, and says more about you than AA.

    Since you asked, I am self employed, a lifetime Platinum, a lifetime AAdmiral’s Club member, and have never been associated with AA except as a (mostly) happy customer. To me, it’s sad that you can’t imagine someone having a different perspective than you.

    AA and the people of AA have been stunningly good to me at many points in my nearly 40 year relationship with this airline. I *do* allow for other airlines performing better from time to time, and I also agree that AA has had many struggles over the years (including later years). Why can’t *you* allow for AA having some really shining points, too?

    How can you and I have such different perspectives? Maybe our approach is different? I generally meet and work with great people, and I’m glad.

  14. Ridiculous that any corporations get bailed out this time! Has nobody learned from the financial meltdown caused by wall street greed in 2008! Airlines think they are for profit companies like amazon. They are not! They are no different than any utilities! That’s all they are so screw them if they didn’t save cash when they were making billions in profits that they can’t whether a few months of disturbances . Fend for yourselves just like everyone else!

  15. All I know is that when this is all over, the airlines will have eight people in a row for domestic coach travel instead of the six they have now to recoup money. Along with adding about five more rows. No one over five five and 130 lb will fit in the seats anymore without cutting off their circulation. And you’ll have to swipe your credit card in order to use the restroom.

  16. Please stop posting misleading and false headlines. We are not laying off anyone right now. All you have are doing is creating panic with sensationalism. Shame on you.

  17. They were planning to not have home based reservation agents for months now. This wasn’t part of the COVID-19 bailout.

  18. Tom and Chris are absolutely correct. The two are not related. To date, AAL has only offered *voluntary* options (where operationally feasible) depending on work group including early outs, reduced work schedule and leaves. Are airlines perfect entities that have made all the right decisions, certainly not. But the majority of people that are so quick to say lets just let the industry fail don’t have a full understanding of the ramifications. Either way, the amount of misinformation out there right now is almost as dangerous as the virus itself.

  19. Home based agents are not being laid off. They are closing the “work location“. Agents are able to
    Move to one of the three offices that will remain open, sever from the company, or retire. You saying they’re being laid off is incorrect!

  20. @Mel – agents who work from their home are being given the option of moving to another part of the country or lose their jobs. American knows going in that they will shed basically that entire workforce. don’t be disingenous.

  21. This article is wrong onnso many levels.

    There are 0 to 5 people on every flight and still flying…in cargo are medical supplies on many flights. Schedule reductions started this week. Many are taking Voluntary time off for various reasons including health precautions. Go on AA Facebook page and read the wonderful feedback to AA response to this.crisis versus United who are not refunding tickets on cancelled flights, keeping RESIDUAL refunds if ticket difference on new ticket is cheaper, etc.

    Just stop Gary Leff. Enough.

  22. Laying people off despite receiving bailouts defeats the whole purpose. If I’m going to lose my job anyway then it affects me the same if AA shuts down, so we may as well send those billions to taxpayers instead.

  23. I am an old guy now 85,but i remember when a commercial flight,even in economy,was damned near a 4 star hotel experience.The seats in a DC 3 were like mini arm chairs-crowds did not exist.I flew here from the UK in 1957 (June) I was 21-the aircraft was a DC 6c-half full, flying time LHR to Idlewild JFK, then was about 11 hours.THe downfall of the airline business (in this country)was de regulation in the 1970’s,plus of course the incredible increase in the population-about 170000 000 in 1957 now 325000 000 about 1/3 of China-The whole social structure of the US has changed FOR THE WORSE during this time,and in my opinion Mr Warren Buffett’s remarks about the airline business was right on-he knows a “thing or two”! Travelling today is nothing short of a horror show-I worked in the airline business for close to 30 years-in my last couple of years I had to remove passengers from flights for body odour to sexual adv ances by male passengers-something that was UNHEARD OF in the 1950’s–enjoy your next flight ladies, and gentlemen-keep your hands to yourselves-and please wash before boarding

  24. AA took back their job offers yesterday to new hires who hadn’t received a training class yet. Get ready for October 1st everyone.

  25. The bailout for AA did nothing, They are cutting 30% of non-union work force. AA only cares about putting money in the exc. pockets and does not care about any lower employees. Never did and never will.

    Trust me I know after 30 years.

  26. How can you claim the bailouts did nothing?? Do you know that the situation would have been the same without them?? Pretty big claim based on pretty thin evidence. (Yes, this is a pretty nasty situation, but wouldn’t it be worse without this assistance???)

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