American Airlines Tells Employees: Furloughs Are Inevitable

Major U.S. airlines have tried to shrink their workforces to reflect the new reality of reduced airline demand, offering leaves and early retirement packages to employees in hopes of avoiding furloughs.

On Wednesday American Airlines President Robert Isom told a group of flight attendants, however, that the airline is “so fortunate the country and the government looked upon” it as important to the country – and pumped in subsidies as part of the CARES Act. However as the airline “come[s] to the end of the payroll support program at the end of September” and is allowed to let go of employees, “the next step is sizing the airline to exist at [the new level of passenger] demand.”

Fundamentally the reason the airline faces “the horrible situation of being confronted with furloughs” is that fewer people are traveling, and that supports fewer flights and fewer jobs – so that furloughs “at this point in time seem inevitable.”

“Without additional help from the government furloughs are inevitable,” according to Isom. That’s why American Airlines and labor unions are asking for a ‘straight extension’ of payroll money from the government for 6 more months. Even though,

  • the airline has previously said that payroll grants covered around 75% of payroll expense
  • they’re only looking to furlough around 30% of employees
  • they’re reducing their payroll with leaves and early retirements so shouldn’t require nearly as much support

And most of all, even though airlines like Southwest say they don’t even need to furlough anyone this year and CEO Doug Parker told employees previously they wouldn’t be lobbying for more money because the airline can survive without it, they still want six months of full support to subsidize payroll – including for people who will be continuing to work anyway.

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, 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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  1. AA has flight crews that used to wrk on international flight to Asia or Europe . All those long haul flight attendants and pilots are all fired?

  2. No they are enjoying time off with pay. They are have 40 50 60 years seniority no one can tough them. It is the new generation with up to 9 years seniority will be affected.

  3. No one is fired. It’s called furlough. I have worked there for 32 years. It may take years, but usually everyone who gets recalled comes back. This is 100x worse than 9/11. With no leadership from the federal government. It’s disgusting. VOTE VOTE VOTE and get the current administration and their unqualified morons OUT!

  4. “Without additional help from the government furloughs are inevitable,”

    Look….I hate to see people losing their jobs. A family member just did. But the government can’t continue to fund this. It’s unsustainable. I look at my grandkids and wonder what the hell we are leaving for them.

  5. AA need to give a little more money for the early out. Most are not prepared totally but would volunteer.
    Look at Southwest.

  6. How did AA use the 3 months of government aid in the first round? Did they start to rebuild customer confidence by keeping middle seats open and enforcing masking? Did they emphasize safety at the gates?

    Who really believes that in 6 months-Feb. 1, 2021- AA will be profitable?

  7. Every recession of any depth and both fuel crisis in the ’70’s were followed by airline down sizing and furloughs. I should know as a retired airline pilot I got caught in two of them. Unfortunate but that is how it has been and will continue to be.

  8. The government isn’t AA’s endless paper press! Dan Parker’s entitlement to tax payer funds is unreal, perhaps he ought to be furloughed and his salary be used to limp the airline to the next stage of chspy 7.

  9. @Julia – sorry you are in the situation you are but it isn’t the government “morons” that are causing it. The funding provided by the US government (with support of both parties and the white house) is more than any other country and frankly incredibly generous (no other industry basically is paying their employees not to work until 10/1).

    Get over yourself. You can’t expect tax payers to keep subsidizing you! Neither party will do that for long. Even the most liberal socialists (who are a very small minority in Congress now) wouldn’t be in favor of more corporate charity – they would want to raise taxes and use it for Medicare for all, education subsidizes, etc but not for corporate welfare.

  10. What makes the airline personnel more important than the machinist in the machine shop, the admin assistant at the distributor, the cook, the waitress, the mechanic? All who make less per hour than airline personnel and work harder and more days a month. The government needs to step back and let the well run airlines continue and the poorly run airlines fail. That is what capitalism is all about, not supporting industries and groups with expensive paid lobbyist to get congress to hand out more money.

  11. If the 70 & 80 year old flight attendants would retire because they can’t do their job at this point anyway, there wouldn’t be layoffs. Trump 2020!

  12. @Thomas Frith “Dan” Parker has not taken a salary in something like 5 years. “Dan” Parker is only entitled to the same taxpayer funds as his competitors. Just as you may have been entitled to a taxpayer funded stimulus check. (Did you accept it?) “Dan” Parker’s actual name is “Doug”.
    Blog space is a fantastic place to vent your thoughts, but you should brush up on the facts ahead of time.

  13. The IOU they are offering for early retirement is what it is IOU and that’s it . The jr.guys get laid off with recall . Offer a descenr package older ones would leave . The IOU doesn’t come close .

  14. Some of you in these comments are complete idiots and haven’t the 1st clue as to what is actually happening. Its sad really. Let’s talk infrastructures…….without the airlines, many many many other systems would fail. Transportation is a huge part of it.

    Also Yes, there could be more money thrown at the “IOU” retirement package. But consider that it’s the poor financial planning of said individuals that doesn’t allow them to leave PLUS some of their mindsets are that the company owes them something for working 71 years. Jeeze, gimmie a break! Most other industries have retirement ages……the airline industry should get onboard. Im not sure I’d count on some of these older FAs to get me out of a plane in an emergency anyway……have you seen some of them?

    So many issues with very focused and selfish motives without doing whats best for the greater good. It’s sickening. Oh…..and Trump the Chomp for 2020??? Really?!? A complete bafoon!

  15. So James Carter, you are saying that if American goes bankrupt they all will go bankrupt? How many airlines have failed in the past? What happens when they do? Another airline picks up their routes or someone starts another airline. I don’t know who would be willing to jump into the airline business today but if United, Delta, Southwest, you name it goes belly up all the other remaining airlines would pounce on their routes like buzzards on a carcass. Southwest doesn’t have to lay anyone off this year because a lot of people (me included) will fly them now rather than American with their nasty flight attendant attitudes and instead of bad service there is no service. So why pay legacy rates when you can save a few bucks and get the same service without the attitude.

  16. James Carter ,are you talking about the bafoon we had for 8 years before President Trump who did everything for Hollywood and nothing for the American people..

  17. My name is on list of potential furloughed and I did not receive this notice in the mail or by way of my union rep… a friend from another station sent it via text. WTF! No more bailouts! CARES act is here and my hours were cut regardless. Why take the bailout and not allow us to work? A new act will only prolong any responsibility to the workforce. Get out now and good luck.

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