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American Airlines plans 19,000 job cuts if federal aid lapses

Mary Schlangenstein
Bloomberg

American Airlines Group Inc. will cut 19,000 workers if federal payroll aid expires as scheduled on Oct. 1, capping a 30% workforce reduction since the coronavirus pandemic began to torpedo travel demand.

About 17,500 employees will be furloughed, meaning they are eligible to be called back when conditions improve, while 1,500 previously announced cuts to management staff will take effect, the airline said in an email Tuesday. American is the first major carrier to disclose the extent of shrinking operations to adjust to passenger numbers that are down 70% from last year.

In this May 28, 2020 file photo, travelers check in at the American Airlines terminal at the Los Angeles International Airport.  American Airlines says it will furlough or lay off 19,000 employees in October as it struggles with a sharp downturn in travel because of the pandemic.

American’s plan heralds thousands more job cuts at U.S. airlines after Sept. 30, when job protections linked to federal financial aid expire. Debate has stalled in Congress over a six-month extension of the government’s $25 billion payroll support program for passenger carriers, which would carry the same restrictions on workforce cuts. American said the involuntary job cuts could be avoided if lawmakers extend payroll support.

“We have come to you many times throughout the pandemic, often with sobering updates on a world none of us could have imagined,” Chief Executive Officer Doug Parker and President Robert Isom said in a letter to employees that was disclosed in a regulatory filing. “Today is the hardest message we have had to share.”