An airline employee passes through empty American Airlines terminals at Ronald Reagan Washington National Airport in Arlington, Virginia, on May 12, 2020.
ANDREW CABALLERO-REYNOLDS
American Airlines told staff Thursday that it has more than 20,000 employees it doesn’t need for its reduced fall schedule as the airline and its competitors face weak demand for air travel during the coronavirus pandemic.
The Fort Worth-based airline and other U.S. airlines urge employees to buy or early retirement options to cut staff before resorting to involuntary measures such as layoffs.
US carriers are prohibited from firing or reducing their staff payment rates until September 30 under terms of $ 25 billion in support of government payroll aimed at softening the impact of the virus on their businesses.
“We currently anticipate having 20-30%, or over 20,000, more payroll team members than we need to operate our schedule this fall,” CEO Doug Parker and President Robert Isom said in a staff note. “To be clear, this does not mean that 20,000 of our team members will be suspended in October, it simply means that we still have to work to adapt the size of our team to the airline we operate.”
American and its competitors have been increasing liquidity and lowering costs as demand remains a fraction of 2019 levels, even for the peak summer travel season.
American and four other airlines reached agreements for portions of $ 25 billion in federal loans to weather the crisis, the Treasury Department said Thursday. American said it expects to finalize the loan in the third quarter.
Deep in the demand crisis in April, American had about $ 11 million in cash income, which rose to $ 358 million in May and more than $ 1 billion in June, executives said.
“While that improvement is encouraging, it compares to an average of $ 4.2 billion each month during the same period in 2019, so we have a long way to go,” Parker and Isom wrote.
The carrier was burning less than $ 35 million a day in late June, down from $ 100 million a day in April, they said.
American expects demand for international travel to remain silent next year. Earlier this week, he said his long-haul international calendar in the summer of 2021 would be 25% less than what he offered in the 2019 season and that he would cut 19 routes.
The airline also plans to cut widebody cabin crew personnel for international and transcontinental routes and will reduce some of its stewardess bases and waste bases in the Raleigh-Durham area and in St. Louis.
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