American Airlines plans to cut 19 000 jobs

American Airlines plans to cut 19 000 jobs

The FINANCIAL -- American Airlines announced that it would shrink its workforce by 40,000, including 19,000 involuntary cuts, on 1 October, as the coronavirus pandemic continues to weigh on air travel. Other airlines such as United, British airways and Lufthansa have warned of similar cuts. American executives said that the furloughs can be avoided if the federal government gives airlines another $25 billion to help them cover labor costs for more months.

American Airlines Group Inc. said it would shed 19,000 workers Oct. 1, the first big wave of the tens of thousands of pilots, flight attendants, mechanics and other airline employees in jeopardy of losing their jobs when protections tied to federal aid to U.S. carriers expire this fall. American’s cuts are short of the 25,000 potential job losses it warned were possible last month. But together with retirements and temporary leaves of absence, the reductions will make the carrier about 30% smaller than it was in March, The Wall Street Journal reported.

Other carriers have warned of similarly large cuts amid a slump in air travel. United last month said as many as 36,000 jobs were at risk. Germany's Lufthansa has warned it may cut 22,000 positions, while British Airways is slashing 12,000 jobs.The reductions come amid warnings that the impact of the pandemic will cause airline losses of more than $84bn (£64bn) globally this year. In the US, the terms of a $25bn (£19bn) government bailout barred airlines from making significant job cuts before 30 September. While airlines have called for further support, talks in Washington about an aid package 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, according to BBC.

CEO Doug Parker and President Robert Isom said in a message to staff that they 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 they provide, especially to smaller communities. Executives also said that they expected American to be flying at around 50% capacity in the last three months of 2020. They expect international flights to be reduced to 25% of 2019 levels. American stated that it expected less than 100,000 people to be working in October, while there where 140,000 people working at the beginning of March. 12,500 people have voluntarily left the airline since March and 11,000 more will be on voluntary leave in October.

Senior Vice President of Flight Service Jill Surdek wrote to employees in an email. “As you know, the COVID-19 pandemic has hit the airline industry particularly hard, The resulting economic situation has been worse than any of us could have imagined, and customer demand is returning at a much slower rate than we originally anticipated. As a result, the company has been forced to reduce the airline schedule further.”

Based on current demand levels, American Airlines said it now plans to fly less than half of its normal schedule in the December quarter, with international flying reduced to only a quarter of 2019 levels. Its rival United Airlines has warned that 36,000 jobs there are on the line, but has not announced final cuts. Among other large US airlines, Delta on Monday announced furloughs of nearly 2,000 pilots but has said the numbers could be reduced if they agree to a cut in minimum pay, as reported by ABC News. 

Among other large US airlines, Delta Air Lines on Monday made an announcement about furloughs of nearly 2,000 pilots but has said that the numbers could be reduced if they made an agreement about cutting in minimum pay. Southwest Airlines said that it hopes to avoid involuntary cuts. Budget carrier Spirit Airlines pilots union made a statement this week that around 2,500 pilots agreed to work fewer hours to prevent layoffs in October.

Thousands of British Airways’ staff will find out in the coming days whether they have lost their jobs as the airline pushes ahead with its restructuring plan in a battle to survive the worst crisis in its history. BA cabin crew, engineers and ground staff received letters informing them of the outcome of plans to cut up to 12,000 jobs, almost 30 per cent of the airline’s workforce, following months of tough talks during the coronavirus crisis.  According to BA, more than 6,000 staff have applied for voluntary redundancy, which will help reduce the number of compulsory job cuts. The majority of these — about 4,500 — are from BA’s Gatwick and Heathrow cabin crew, as reported by The Financial Times.

It should me noted that American Airlines is upgrading its Clean Commitment by adding the electrostatic spraying solution SurfaceWise®2 from Allied BioScience to its multitiered cleaning and safety program in the coming months.  In the coming months, American will begin using SurfaceWise2 for electrostatic spraying on surfaces inside its aircraft with plans to use the product throughout its entire fleet, including those in its American Eagle regional partners. Other elements of the airline’s multitiered Clean Commitment, include enhanced aircraft cleaning performed before every mainline flight and an even deeper overnight cleaning.

JetBlue Airways Corp. and American Airlines Group Inc. announced one month ago a strategic partnership that will create seamless connectivity for travelers in the Northeast and more choice for customers across their complementary domestic and international networks. Customers will experience a number of benefits from the new partnership. In addition, the relationship will accelerate each airline’s recovery as the travel industry adapts to new trends as a result of the pandemic. The partnership includes an alliance agreement that proposes codeshare and loyalty benefits that will enhance each carrier’s offerings in New York and Boston, providing strategic growth and driving value for customers and crewmembers of both airlines.

 BA to cut up to 12 000 jobs while Lufthansa plans to axe 22 000

Author: The FINANCIAL