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Over 19,000 Airline Employees Prepare for October Furloughs

Over 19,000 Airline Employees Prepare for October Furloughs
Joe Cortez

The airline industry is about to lose over 19,000 employees, as the money from the COVID-19 pandemic Payroll Support Program comes to an end. American Airlines will cut 17,500 front-line employees from their ranks, while Delta is preparing to release as many as 1,900 pilots at the end of September.

Two major airlines are preparing to let go over 19,000 employees, after Congress could not come to a resolution to provide additional support to airlines in a “phase four” COVID-19 pandemic support bill. American will release 17,500 front-line employees from their ranks, while reports suggest Delta will remove a number of pilots.

Furloughs Result of Slow Recovery and Lack of Government Support

As the funds from the CARES Act were only guaranteed through Sept. 30, 2020, airlines warned that they would be forced to reduce staff in order to stay viable. Unions campaigned to Congress to extend the Payroll Support Program, while Southwest Airlines chief executive Gary Kelly made an open call to lawmakers to extend funding to keep workers in place.

However, Capitol Hill has yet to act on a new COVID-19 bill, which would potentially extend funding to airlines and the public. As a result, the airlines are finalizing their furlough lists.

After sending layoff notices to 25,000 employees, American informed 19,000 employees they would be furloughed starting on Oct. 1, 2020. In a regulatory filing with the U.S. Securities and Exchange Commission, the airline said their total workforce would be cut by 40,000 compared to the beginning of the year.

“We have come to you many times throughout the pandemic, often with sobering updates on a world none of us could have imagined,” American leaders Doug Parker and Robert Isom wrote, according to the SEC filing. “Today is the hardest message we have had to share so far – the announcement of involuntary staffing reductions effective Oct. 1.”

The majority of those cuts come from the flight attendants: 8,100 attendants will be furloughed, while 3,000 employees from wholly-owned carriers will also lose their jobs. Over 2,000 fleet service employees will be furloughed, along with 1,600 pilots.

A table of employees by working group expected to be furloughed by American Airlines. Table source: American Airlines 8-K filing.

A table of employees by working group expected to be furloughed by American Airlines. Table source: American Airlines 8-K filing.

At Delta Air Lines, a similar number of pilots will be furloughed from the carrier. According to a memo seen by Reuters, the airline says because of the depressed demand for air travel, the airline is overstaffed.

“We are six months into this pandemic and only 25% of our revenues have been recovered,” John Laughter, head of flight operations at Delta, wrote in the memo, as quoted by Reuters. “Unfortunately, we see few catalysts over the next six months to meaningful change this trajectory.”

Airlines Could Recall Employees or Prevent Layoffs if Additional Support Materializes

The furloughs are the first of what could be a domino effect across the industry. During the summer of 2020, United Airlines said they may furlough as many as 30,000 employees, but have not yet announced their final numbers.

However, the airlines say these layoffs can be prevented if Congress were to pass additional funds for payroll support. American asked their employees to contact their representatives to bolster support for another round of PSP funds.

Despite this broad bipartisan support, a PSP extension is tied up in a larger COVID-19 relief package, which our elected officials haven’t yet been able to negotiate,” American’s Parker and Isom wrote in their memo. “So 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. If you haven’t already done so, you can let your elected officials know just how important a PSP extension is to you, your families and our economic recovery.”

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