Airlines to shed tens of thousands of workers as federal pandemic aid expires
American Airlines will lay off 19,000 workers in October after federal aid designed to protect jobs lapses, the carrier said on Tuesday. Word of the drastic cuts came a day after Delta Air Lines told its pilots that 1,941 of them would be furloughed. Both moves come as the industry attempts to stay aloft amid catastrophic losses stemming from COVID-19.
The massive cuts are not entirely unexpected. Major airlines weeks ago warned they'd have to furlough more than 80,000 pilots, flight attendants and other airline workers once the $25 billion in government aid runs out at the end of September. The money, which covered wages, was initially granted in March as part of a larger economic aid package and was intended to help carriers survive the pandemic until the public health crisis ended.
But as the coronavirus has continued to spread, so has the industry's slide. In addition to vacationers reluctant to travel for fear of contracting coronavirus, the large U.S. carriers have lost money-generating business travelers to the pandemic, jeopardizing the livelihoods of tens of thousands of aviation workers.
"We have come to you many times throughout the pandemic, often with sobering updates on a world none of us could have imagined," American Airlines' CEO Doug Parker and its president Robert Isom wrote in a memo to staff announcing the reductions. "Today is the hardest message we have had to share so far — the announcement of involuntary staffing reductions effective October 1."
American will have at least 40,000 fewer employees as of the start of October than it did on March 1, before the pandemic spread widely. The carrier had more than 140,000 U.S.-based employees pre-pandemic, and the cuts will leave its headcount at or below 100,000, it said.
In October through December of this year, American plans to fly less than half its usual schedule, and only one-fourth of its lucrative international service, the Associated Press reports. The airline, based in Fort Worth, Texas, announced last week that it was pulling out of 15 smaller U.S. cities in October. That move was seen as a warning shot to Washington that it should approve more money for airline payrolls, the AP reports.
Delta's head of flight operations, John Laughter, told employees in a memo on Monday that the airline is "simply overstaffed," and would be furloughing more than 1,900 pilots.
"We are six months into this pandemic and only 25% of our revenues have been recovered. Unfortunately, we see few catalysts over the next six months to meaningfully change this trajectory," Laughter wrote in the memo emailed to CBS MoneyWatch.
The Air Line Pilots Association said it's "extremely disappointed that management has chosen to furlough 1,941 pilots effective October 1," adding that the carrier was using the threat of unpaid time off to force the union to accept involuntary concessions.
More than 1,500 pilots are voluntarily leaving Delta next week, with hundreds more to follow, to give colleagues a chance to continue working, ALPA said in an emailed statement. All told, nearly 4,000 pilots are leaving Delta, according to the union.
"Despite the furlough notices, ALPA will continue to work with our airline to find mitigations for this temporary overstaffing," it added.