American Airlines is about to inform management and support staff that they expect at least 30% to be let go, according to internal documents reviewed by View From The Wing. The airline wants some of these layoffs to be voluntary, and they’re taking both a carrot and stick approach.
- There are two voluntary packages employees can choose from
- if they do not pick one they may be subject to the involuntary termination package.
The federal government provided $5.8 billion to American Airlines for payroll but that just delayed the inevitable.
While the CARES Act requires airlines to guarantee employment and pay rates to existing staff through September 30, his plan will involuntarily terminate management and support staff effective mid-July, but their pay will carry them to the September 30 legal deadline.
Employees up to a level 6 manager can take either:
- 6 months at 1/3 pay and 250,000 frequent flyer miles plus 5 years of travel benefits (“pay priority” package) or
- 3 months at 1/3 pay, 21 months of health benefits, and 10 years of travel benefits (“Travel/Health priority” package)
Involuntary separation receives 3 months of severance – and goes off payroll October 1. They get 1 year of travel benefits and are on their own to pay for COBRA health benefits.
More senior directors and above will receive different offers.
Just last summer Doug Parker told employees that their not ever having to worry about their jobs would be his legacy,
where they didn’t need to worry about whether their company was going to be there for them. Into a place where they knew that as long as they show up and do their job as well as they do the company would be there for them forever.
Doug Parker told employees literally this month that he believed they’d get through this crisis without involuntary furloughs. When United’s Scott Kirby announced a reduction in hours for employees and an intention to lay off significant staff Parker called that out as illegal.
The airline business isn’t expected to return to where things were at the start of the year for some time, so fewer employees are needed to support the business. And in order to make it through to where demand recovers, they are working to conserve cash. Already they’re the most fragile airline in the U.S.