As federal payroll support winds down, American Airlines furloughs could impact up to 13,000 employees next month. On Wednesday, the airline confirmed that it may place thousands of workers on involuntary leave as the second round of federal payroll aid nears expiration.
The looming furloughs stem from a combination of slow vaccine distribution and a sharp decline in international travel demand, partially due to new COVID-19 testing requirements for incoming travelers. Doug Parker, CEO of American Airlines, stated, “The vaccine is not being distributed as quickly as many of us believed, and international travel restrictions have significantly reduced demand.”
American isn’t alone in this crisis. United Airlines issued similar warnings just days prior, notifying over 14,000 employees of potential furloughs. The $15 billion in payroll support previously passed by Congress required airlines to recall furloughed staff and retain payroll through March 31. However, with no long-term solution yet in place, airline labor unions are calling for an additional $15 billion in aid to sustain operations through September 30.
Parker and President Robert Isom expressed strong support for union-led efforts to secure more assistance. “We support our union leaders’ push for an extension and are committed to helping in any way we can,” they said.
According to American’s filings with the Securities and Exchange Commission (SEC), the furlough notices span various departments:
- 40 instructors
- 100 dispatchers
- 1,205 passenger support staff
- 1,420 maintenance technicians
- 1,850 pilots
- 3,145 fleet service workers
- 4,245 flight attendants
These notices, issued under the Worker Adjustment and Retraining Notification (WARN) Act, are required at least 60 days in advance. However, receiving a notice does not necessarily guarantee job loss—it’s a precautionary step many companies take when layoffs are a possibility.
In an attempt to soften the blow, American Airlines is offering early retirement packages to long-serving employees with over 10 years of tenure. These packages include up to $150,000 in a retirement health reimbursement account, along with extended travel benefits. For others, the airline is providing temporary furlough options lasting one to two years with partial pay included.
Notably, American Airlines is currently the only major U.S. airline moving forward with pilot furloughs. Delta, United, and other carriers have reached deals with unions to avoid layoffs, trading reduced flying hours and temporary pay cuts for job preservation.
This decision has drawn criticism from the Allied Pilots Association (APA), the union representing American’s pilots. The APA argues that the airline has failed to implement voluntary measures—like spreading out flying time among remaining pilots—that could help minimize job losses. They contend that the company’s approach could harm employee morale and long-term loyalty.
As the March 31 deadline approaches, all eyes are on Congress and the Biden administration to see if more relief will come through for an industry still reeling from the effects of the pandemic. In the meantime, thousands of airline workers remain in limbo, waiting to learn whether their jobs will survive the latest turbulence in the aviation industry.
Photo Credit: American Airlines