American Airlines: Up To 25,000 Employees May Lose Their Jobs Unless We Get More Government Subsidies

United Airlines is going to send possible furlough notices to 39% of its employees. Republic Airways is also going to send WARN Act notices to 40% of its staff.

American Airlines CEO has said they have 20% – 30% too many flight attendants and 10%-20% many pilots.

Today American is sending WARN Act notices to about 25,000 employees, but they want those employees to lobby for more federal government subsidies to stay on payroll.

Here’s the money quote on subsidies, which the airline used to lobby against when they thought that was in their interest,

[I]t’s worth noting that each of our unions has expressed support fo rlegislation that would extend the Payroll Support Program funding for six months in light of the much longer impact of the pandemic than was anticipated when the CARES Act was enacted. As currently proposed, the effect of this legislation would be to delay any involuntary furloughs until March 31, 2021, at which point there would most certainly be more demand for air travel, and along with that demand, much less need for involuntary furloughs throughout the industry.

This is a union-led initiative across our industry, but AMerican is supportive of any legislation that would protect our team’s jobs during these extraordinary times. If you are interested in supporting these legislative efforts, we recommend that you work with your union leaders to ensure your voice is heard. That an extension of the Payroll Support Program is being considered illustrates the incredibly important work all of you do every day across our country and globe. Notably each direct airline job supports 13 additional jobs that support our aviation infrastructure and industry.

When I started pointing out that current subsidies ran out September 30, and that would be large layoffs one month before the presidential election, so airlines were posturing for another round of money some of you said I was being paranoid. But it’s not paranoia when they really are out to get you.

Further payroll bailouts harm the economy by delaying labor moving into new industries.

Doug Parker shared in an internal employee meeting last month that in the best case scenario next summer – long after March 31, 2021 – the airline will still be 10% – 20% smaller and need fewer employees and that’s “Assum[ing] a world where there’s a vaccine and everybody’s flying again and no one even remembers what coronavirus means next summer.”

So another round of bailouts will just delay layoffs. But those bailouts in the meantime pay not just for employees who would have been laid off, up to 40% in the scare numbers at some airlines, but for employees that remain on the books and that’s not even accounting for those who go on voluntary leave or take buy outs. In other words, an extension of the Payroll Support Program will stick money in the till of the airline even beyond payroll, bailing out equity holders and bondholders, without even saving all the jobs at stake.

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. Do you have details of the early out programs offered by the various workgroups?

  2. @AirlineFan – I am just now finishing up my post on that, but basically other than pilots everyone with 10+ years of seniority is offered 456 hours of pay, I’ve also uploaded details on benefits and travel.

  3. @Jack – I did post that a bailout is so absurd as to be inconceivable, but that union jobs could sway legislators in the house and avoiding job losses a month before the election could sway the senate and president

  4. They’ll come to the trough every time they can. And now they want the unions on their side to pressure the politicians.

    If, after years of record profits, they feel you can’t make it without more help, then maybe it should happen.

  5. Newsflash from the whoever would have guessed department: Big corporations that were making money hand over fist a few months ago want a government bailout to insulate their businesses from the effects of the pandemic. (wha wha wha wha )

    Airlines want what is in effect a government funded Covid-19 financial vaccine. Taxpayers, however, get stuck with the pandemic’s negative effects on the economy and our health plus paying for the bailouts with interest. That sounds fair. Instead of the government paying airlines to retain employees who have no work to do (that’s why they are being laid off), our government should use our money to pay us to travel. Vouchers for air travel worth $1,000 per person let’s say.

    A program like that might even boost demand enough that airlines not only reject layoffs, they actually increase the size of their workforces. It is our money. We might as well benefit directly when the government spends it! Just as there is no national plan to keep schools safe, a plan to make travel safe is also unnecessary.

  6. Why not let the market decide? Why should government have to keep it’s thumb on the scale?

    In other words, it’s foolish and inefficient to string them along with taxpayer money if they are not an efficient user of people’s talents and investors’ capital. Let them shrink if they need to. We are not the USSR.

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