American Airlines will cut 30% of its management and support staff, or about 5,000 positions, in anticipation of “running a much smaller airline” for the foreseeable future due to fallout from the novel coronavirus pandemic, the airline told employees late May 27.
The job cuts will start with voluntary programs, which will be open through June 10, as outlined in a letter signed by Elise Eberwein, American’s EVP of people and communications. “If there are not enough early-out volunteers, we will have to take the difficult step of involuntary separations,” the letter continued, adding that decisions would be announced in July. Affected employees would remain on payroll through September 30 so that American complies with CARES Act payroll-support funding requirements that ban involuntary layoffs until October.
While demand has shown signs of improving from what was essentially a total collapse in April, there is little hope that pre-COVID-19 levels will return anytime soon. American has parked nearly 150 aircraft and expects to be flying about 100 fewer in Summer 2021 than originally planned. American began 2020 with 942 mainline aircraft and 605 regional aircraft with partners, including 400 within its wholly owned regional subsidiaries.
“The demand environment continues to improve, but [we] certainly don’t have any view that it’s going to get back to 2019 levels any time in 2021,” CEO Doug Parker said at a May 27 analyst conference. “We’re looking to make sure we’re right-sized, and we’ll continue to do so.”
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