American Airlines Now Offering Employees Leave At 25% Pay And Full Benefits Or Early Retirement

Two weeks ago American was asking flight attendants to take leave with no pay. Unsurprisingly they didn’t have enough takers. Pilots, however, could take leave or early retirement at about two-thirds pay.

American is now offering paid early retirement and paid leave across the company, not just for pilots, though of course the leave options aren’t as generous as what pilots receive. Here’s what temporary leave looks like:

  • Frontline employees can take 3, 6, 9 or 12 months of leave
  • Management and support staff can take 3 or 6 months of leave (or 1 month unpaid, or 3 and 4 day work week schedules with reduced salary)
  • Paid leave is at 25% compensation plus full benefits

American is also offering early retirement (‘early out’) at 50% pay for a year plus 30 months of benefits (including 18 months of company-paid COBRA benefits). Frontline employees with 10 years of service are eligible, and management and support staff with 10 years and whose age plus years of service equals 65 are eligible.

According to American’s internal documents, “[t]he deadline to apply is Friday, April 3, at 11:59 p.m. CT.”

These options are all voluntary, and an improvement over the original flight attendant offer. The leave options are designed to conserve cash, and the ‘early outs’ to downsize the airline without furloughs for a future, after government bailout cash runs out, where the airline – and all airlines – are smaller.

The cash buy out amounts for 10 year flight attendants, for instance, won’t be very high but they’ll be looking at their seniority numbers to see how they’d fare if facing layoffs come the fall. For more senior and highly compensated employees the payments are more generous, but job security is greater.

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. This is pretty much an acknowledgement that ticket sales and flight schedules aren’t coming back soon. They may regret losing pilots giving the coming shortage. Dreams of looser award seat availability are just that.

  2. Airlines are eligible for bail out if nobody loose their jobs and pay. One week ago airlines were deciding if to accept a bail out and now based on the deadlines in the communication it seems that decision was made to furlought employees before taking it.

    Hence airlines are still eligible to bailout and as they will furlough before accepting the terms.

  3. It would be interesting if the mechanics and ramp workers will receive their signing bonuses and their pay increases for the recent (3/26) approved union contract. A plus is these employees will still receive $1,200. from government.

  4. Reduced pay at 25% means they’ll collect unemployment reduced benefit + $600/wk EXTRA from CARES until 7/31. COBRA rates for health care are not cheap.

  5. 25% is 19 hours a month. The bailout only guarantees jobs till Sep 30th. Unfortunately, I expect layoffs after that.

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