American Airlines to Lay Off 19,000 Workers Unless It Receives Additional Federal Aid amid COVID-19 Pandemic

American Airlines received $5.8 billion through the CARES Act earlier this year

Published on August 25, 2020 05:41 PM

AA plane — American Airlines plane. Photo: Nicolas Economou/NurPhoto via Getty

American Airlines has warned employees that the company will lay off or involuntary furlough 19,000 workers if it does not receive additional federal aid amid the ongoing coronavirus pandemic.

The airline's CEO Doug Parker and president Robert Isom delivered news of the dramatic staffing change on Tuesday, writing in a memo obtained by PEOPLE, "Today is the hardest message we have had to share so far – the announcement of involuntary staffing reductions effective Oct. 1."

American Airlines had over 140,000 employees before the COVID-19 outbreak, but will see 40,000 fewer people — about a 30 percent reduction — working in its company come October, according to the airline.

The staffing reductions include 17,500 furloughs and 1,500 involuntary separations on the management side.

Out of 19,000 workers to be furloughed, 8,100 are flight attendants and 1,600 are pilots.

American Airlines plane. Scott Olson/Getty

The final number of reductions came after 12,500 employees had already agreed to leave the airline with retirement or early out programs and another 11,000 workers agreed to voluntary furloughs in October.

"Even with those sacrifices, approximately 19,000 of our team members will be involuntarily furloughed or separated from the company on October 1, unless there is an extension of the [Payroll Support Program (PSP) of the CARES Act]," Parker and Isom wrote in the memo. "The one possibility of avoiding these involuntary reductions on Oct. 1 is a clean extension of the PSP."

Earlier this year, American Airlines received $5.8 billion through the CARES Act under the terms that it cannot lay off, involuntarily furlough or reduce workers' pay rate until October.

In Tuesday's memo, Parker and Isom said that the "only problem with the legislation is that when it was enacted in March, it was assumed that by September 30, the virus would be under control and demand for air travel would have returned."

"That is obviously not the case," the memo read. "Based on current demand levels, we at American now plan to fly less than 50% of our airline in the fourth quarter, with long-haul international particularly reduced to only 25% of 2019 levels."

On Thursday, American Airlines announced that it will be suspending service in 15 markets this October due to "low demand and the expiration of the air service requirements" in the CARES Act. Markets that will be affected include New Haven, Conn.; Springfield, Ill.; and Williamsport, Pa., according to the company.

In March, Sydney-based CAPA Centre for Aviation predicted that many airlines would have a hard time bouncing back financially after the air travel industry was hit hard by the outbreak.

"Emerging from the crisis will be like entering a brutal battlefield, littered with casualties,” CAPA said, warning that, “coordinated government and industry action is needed — now — if catastrophe is to be avoided.”

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