The US government has agreed to provide airlines with an aid package of $50 billion. However, the aid package comes with conditions: airlines must use a portion of the aid to ensure employees are not laid off until at least the end of September. American Airlines is expecting to receive around $12 billion of this aid and will use some of the money to offer staff members paid leave. Previously, it had only offered paid leave to pilots.
While most airlines are asking staff to take several weeks of unpaid leave, American Airlines has now said it will be extending its paid leave offer as well as offering two paid options for staff who wish to leave early. Previously the airline was offering paid leave to pilots only, which caused some friction with other staff members.
However, with the rescue package from the government in place, American Airlines is now offering staff up to 25% of their normal pay as well as full access to medical and travel benefits for leaves of up to 12 months. Staff with over 10 years’ experience who are willing to accept early retirement can expect up to 50% of their pay for a year, as well as 30 months of medical and travel benefits.
According to internal memos, frontline employees have until Friday the 3rd of April to apply for either 3, 6, 9 or 12 months of paid leave. The aim of the generous leave packages is to encourage staff to stay home and minimize the airline’s costs without actually laying staff off. So far, American Airlines’ offer is one of the more generous from the major US carriers.
Beforehand, the airline had only offered paid leave and paid early retirement to pilots. This understandably caused contention. Pilots were going to be paid the equivalent of 60% of their salary for short-term leave while cabin crew were going to get nothing. The aid from the government has allowed the airline to level the playing field a little.
Interestingly, American Airlines is now one of the only airlines to be offering paid leave for staff. Delta has not yet confirmed it will be using the aid to pay employees to take leave. But if it takes the money from the government, it won’t be allowed to lay off staff.
Other airlines including Malaysia Airlines, Singapore Airlines, Silk Air, Virgin Atlantic, easyJet, British Airways, Cathay Pacific and the Lufthansa Group had previously asked staff to take unpaid leave. For the UK airlines, the government has stepped in with an offer to pay 80% of the salary up to a set maximum to those who are displaced.
Not all airlines are forcing staff to take leave, some are just asking for volunteers. However, the message across the board has been pretty clear until now; airlines just don’t have the finances to keep staff when demand for flights is so low.
However, with American Airlines’ new offer, unions and staff at other airlines may begin to demand similar treatment. Especially staff at Delta and United who may feel disappointed that they are not being offered the same package.
Do you think American Airlines’ offer for paid leave will force other airlines to follow suit? Will we see more and more airlines using government money to pay employees? Let us know your thoughts on American’s generous offer and the reaction from other airlines in the comment section.