FORT WORTH, Texas - American Airlines is sending 25,000 Worker Adjustment and Retraining Notification (WARN) letters on July 15 ahead of potential layoffs or furloughs.
Out of those 25,000 letters, 9,950 (37%) are being sent to flight attendants, 4,500 (26%) are being sent to fleet service employees and 3,200 (22%) are being delivered to maintenance and related workers, according to a statement from the airline.
“We hate taking this step, as we know the impact it has on our hardworking team members,” said CEO Doug Parker and President Robert Isom in the statement. “From the time the CARES Act was signed in March, we had a stated goal of avoiding furloughs because we believed demand for air travel would steadily rebound by Oct. 1 as the impact of COVID-19 dissipated. That unfortunately has not been the case.”
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“Our passenger revenues in June, while we believe are better than others in the industry, were more than 80% lower than June 2019,” the letter states. “And with infection rates increasing and several states reestablishing quarantine restrictions, demand for air travel is slowing again.”
The letter said the airline anticipates it will have 20,000 more team members on its payroll than necessary for the fall. The airline said that it hopes to reduce its number of furloughed workers significantly through its newly-announced “enhanced leave and early-out programs for represented workgroups.”
American provided details regarding the Extended Leave Program, in which participating employees can take leaves of 15, 18 or 24 months while retaining medical coverage and non-rev travel privileges.
The Early-out program is available to employees who have been with the airline for 10 years that “includes up to $150,000 in a Retiree Health Reimbursement Arrangement for 65-point plan retirement-eligible team members, as well as some positive space travel,” according to the letter. Another Early-out program exists for employees with less than 10 years of service that provides continued medical coverage and non-rev travel privileges.
American Airlines is among the numerous air carriers that have had to quickly readjust their policies and forecasts in the wake of the COVID-19 pandemic. While multiple airlines stopped sales of middle seats in efforts to promote social distancing, American, along with United, recently reverted to booking full flights, according to FOX Business.