American Airlines announced on Tuesday that when pandemic aid to airlines expires in October, the company plans to slash 19,000 jobs.
Breaking the somber news in a letter to employees, American Airlines CEO Doug Parker and President Robert Isom said, “[t]oday is the hardest message we have had to share so far—the announcement of involuntary staffing reductions.”
“We have come to you many times throughout the pandemic, often with sobering updates on a world none of us could have imagined,” the two executives wrote, noting the unexpected nature of economic fallout from the outbreak of the Chinese Communist Party (CCP) virus.
Air travel in the United States plunged 95 percent by April, just over a month after the first known case of COVID-19 was confirmed in Washington state in a man who had returned from Wuhan, China. The virus then surged across the country, with a Johns Hopkins tally noting over 5.7 million infections and over 177,000 deaths. As the outbreak dynamics have slowed, passenger traffic has recovered slightly, but remains down 70 percent from a year ago, and carriers say they need fewer staff.
American Airlines began the year with about 140,000 employees but expects fewer than 100,000 to remain in October.
“The one possibility of avoiding these involuntary reductions on Oct. 1 is a clean extension” of the payroll relief that airlines received under the CARES Act, the executives said. The CARES Act’s Payroll Support Program set aside $25 billion in grants to U.S. airlines, strictly for employee compensation. Under the program, American received $5.8 billion in payroll assistance, with one of the conditions being that the transport giant must wait until Oct. 1 to cut jobs.
Congress has been weighing for weeks whether to grant airlines another $25 billion in payroll assistance, a move that would keep tens of thousands of airline workers on the job for another six months and extend minimum service requirements. But as Congress has struggled to reach consensus on a broader assistance package, the debate over assistance to airlines has stalled.
The U.S. Travel Association has called for lawmakers to reach a deal to help protect jobs in the travel industry, one of the hardest hit by the pandemic.
“It is crucial that leaders in Washington return to the negotiating table immediately and continue the important work they started,” said U.S. Travel Association Executive Vice President of Public Affairs and Policy Tori Emerson Barnes, in a statement. “Since March, more than half of the 15.8 million pre-pandemic jobs supported by the travel industry have disappeared, leaving workers and small businesses in every pocket of America vulnerable to the economic pain of this public health crisis.”
The job cut announcement comes after American said it plans to suspend flights to 15 cities, citing low demand amid the pandemic and the expiration of air service requirements that were another condition of the company receiving billions in COVID-19 relief.
The flight suspensions go into effect in early October, the company said in a statement, adding that the move is the first step towards further schedule changes “in the coming weeks.”
The COVID-19 crisis has hammered the U.S. labor market, with unemployment at 10.2 percent and around 1 million Americans continuing to file for unemployment each week.
The Associated Press contributed to this report.