American Airlines to axe 19,000 jobs when Covid wage scheme ends
American Airlines said it would cut 19,000 jobs in October when a US government coronavirus wage support scheme extended to the industry ends.
In a letter to staff, the company said that its workforce would be a third smaller than it was in March after including voluntary departures and staff on leave.
Airlines have been looking for drastic cost cutting measures as the collapse in air travel wipes out revenues.
American said it expected fewer than 100,000 people to be working in October, down from 140,000 at the beginning of March when global travel bans were imposed, forcing the grounding of its fleet.
"We must prepare for the possibility that our nation's leadership will not be able to find a way to further support aviation professionals and the service we provide, especially to smaller communities," chief executive Doug Parker and president Robert Isom said in a message to staff.
In the letter, executives said they expected American to be flying at about 50% capacity in the final three months of 2020. International flights are expected to be reduced to 25% of 2019 levels.
“We have come to you many times throughout the pandemic, often with sobering updates on a world none of us could have imagined. Today is the hardest message we have had to share so far — the announcement of involuntary staffing reductions effective October 1.”
The previous aid package “assumed that by September 30 the virus would be under control and demand for air travel would have returned,” they added.
In addition to the cuts announced overnight on Tuesday, around 12,500 staff have voluntarily left and a further 11,000 will be on voluntary leave in October.
Other carriers have warned of similarly large cuts amid a slump in air travel. United Airlines last month said as many as 36,000 jobs were at risk, while Germany's Lufthansa is looking to cut up to 22,000 positions, while British Airways is slashing 12,000 jobs.
Virgin Atlantic is shedding more than 3,000 jobs and on Tuesday received approval for a £1.2bn recapitalisation to see it through the next 18 months of financial turbulence as the industry operates in a slimmer form.
A $25bn US government bailout prevented airlines from axing jobs before September 30 and despite calls from the sector for more help, talks with officials in Washington collapsed this month without a deal.
American had received $5.8bn from the payroll aid programme. It recently announced plans to suspend service to 15 smaller airports in the US due to low travel demand.
The International Air Travel Association has warned the impact of the pandemic will cause industry losses of more than $84bn (£64bn) globally this year.