American sees 25,000 jobs at risk when US aid expires

Bloomberg

American Airlines Group Inc will notify 25,000 employees, or 29% of its US workforce, that they’re at risk of losing their jobs later this year as the carrier adjusts to a collapse in travel.
The cuts are needed because the coronavirus pandemic is still battering demand for flights, the company told employees. The reductions would take effect after restrictions tied to US payroll aid expire at the end of September, and the final cuts could be lower depending on how many workers choose a newly offered plan with early out and leave options.
American’s warning heightens the risk of massive job losses at US airlines in less than three months. A resurgence of Covid-19 cases and related travel restrictions are crimping a fledgling recovery in demand for flights, increasing the pressure on carriers to cut costs further. United Airlines Holdings Inc. has sent notices of potential layoffs to 36,000 people, or 45% of its US workforce.
“We hate taking this step, as we know the impact it has on our hardworking team members,” American Chief Executive Officer Doug Parker and President Robert Isom said in a letter to employees.
“We hope to reduce the actual number of furloughs significantly through enhanced leave and early-out programs.”
American fell 1.1% to $13.29 after the close in New York.
The recent growth in US Covid-19 cases is cooling the very modest rebound in demand, American said, echoing similar observations by United and Delta Air Lines Inc. The lack of a robust recovery dashed American’s hopes that steady gains in flying would enable it to avoid furloughs when federal payroll support ends.
“With infection rates increasing and several states reestablishing quarantine restrictions, demand for air travel is slowing again,” Parker and Isom said.
They also cited a drive by labor unions to persuade Congress to extend payroll assistance. The Payroll Support Program, with $25 billion for passenger carriers, was initially passed earlier this year as part of the $2 trillion Cares Act.
“This is a union-led initiative across our industry, but American is supportive of any legislation that would protect our team’s jobs during these extraordinary times,” the executives said. American’s notices about potential job cuts are being sent to 2,500 pilots, 9,950 flight attendants and 3,200 maintenance workers, among others.