American Airlines says it needs to cut 25,000 jobs by October 1

American Airlines will issue short-term layoff and leave notices to 25,000 union employees as the airline plans to significantly reduce its workforce in October, the company said Wednesday.

CEO Doug Parker and President Robert Isom described the job cuts in a letter Wednesday to employees of the Fort Worth-based airline, saying the COVID-19 recession means there will likely be fewer flights this fall and that the airline will be over staffed.

“From the time the CARES Act was signed in March, we had the stated goal of avoiding permits because we believed that the demand for air travel would recover steadily by October 1 as the impact of COVID-19 dissipated.” said the letter. “Unfortunately, that has not been the case.”

American also unveiled another extended purchasing and licensing program that is more generous than previous offerings, hoping that workers will leave on their own before issuing pink slips or license notices.

The layoff notices include massive cuts across all American worker groups. Some 9,950 notices will be sent to the flight attendants, representing 37% of the airline’s cabin crew. Another 2,500 will be sent to the pilots, representing 18% of those in the cockpit. Approximately a quarter of all fleet maintenance and service workers could be eliminated, about 7,700 in total.

American has already reduced its management and support staff by some 5,000 workers through a combination of involuntary and voluntary layoffs.

“We know that American will be smaller in the future and we must adjust all aspects of our airline to adapt to this new reality,” said the letter from Parker and Isom.

The cuts could wipe out an entire generation, or two, of American Airlines workers. The Association of Professional Flight Attendants said Wednesday that anyone hired after April 12, 2002 would be affected by the cuts, although that could change if more licenses or purchases are taken.

Allied Pilots Association spokesman Dennis Tajer said most pilots who are suspended or fired will likely be waiting for a callback from the airline. American pilots were paid an average of $ 238,000 in 2019, according to the Airline Data Project at the Massachusetts Institute of Technology.

“There is no probable flight job, so they will be eager to return,” Tajer said. “But this is American’s plan and it shows the depth of how hard the virus has affected the entire industry.”

Airline leaders began warning union members last week that notices were coming under the Worker Adjustment and Retraining Notification Act, and Parker has been increasingly outspoken about the possibility of cuts.

Notices are required by federal law to inform employees 60 to 90 days before mass layoffs.

The company hopes to send the notices to union leaders in the coming days. Unions representing workers will decide who will be fired or fired based on seniority, job classification, and where members are stationed.

American Airlines has approximately 130,000 employees, including its regional airlines, with approximately 30,000 of those workers at DFW International Airport or on the company’s headquarters campus.

All major airlines are preparing for the cuts on October 1, when federal stimulus loans and subsidy rules expire and carriers are free to fire workers, issue permits, and cut wages and benefits.

American received about $ 4.1 billion in grants and nearly $ 6 billion in loans as part of the $ 2 trillion CARES Act.

Despite a recent surge in travel, airline executives are preparing for a long and slow recovery. Delta CEO Ed Bastian said this week that future reserves were starting to weaken with the increase in COVID-19 cases.

The number of airline passengers had been increasing slowly since the worst point in mid-April. But aviation trading group Airlines for America said this week that demand was starting to weaken again amid uncertainty in the recovery of COVID-19.

“Our passenger revenues in June, while we believe they are better than others in the industry, were more than 80% lower than in June 2019,” said the letter from US leaders. “And with rising infection rates and several states reestablishing quarantine restrictions, demand for air travel is slowing down again.”

Less than a third of the number of passengers flying now compared to a year ago. And the business of delivering passengers requires a lot of workers and works with low profit margins.

Southwest Airlines CEO Gary Kelly recently told employees of the Dallas-based airline that the number of passengers should triple by the end of the year to avoid layoffs.

Delta said Wednesday it expects to take on a charge of $ 2.7 billion to $ 3.3 billion to cover the cost of early retirements and purchases for 17,000 employees who agreed to leave. She said that up to $ 600 million would go toward cash payments to pilots, stewardesses, ground workers and other employees in the July-September quarter.

American and Southwest Airlines will report second quarter results on July 23.

Unions are making other plans to try to finance jobs in the fall. This week, a proposal by airline unions to extend another stimulus bill found the support of lawmakers, including the chairman of the House Transportation Committee, Peter DeFazio, D-Oregon. The proposal would delay any layoffs on the airlines until March 31, 2021.

“This is a union-led initiative across our industry, but American supports any legislation that protects the jobs of our team during these extraordinary times,” the letter said.

The previous CARES Law granted $ 50 billion in loans and grants to airlines.