With the US airline industry undergoing its biggest shakeout in generations, American Airlines is gearing up to furlough thousands of employees. There are reports furlough notices will be sent to employees sometime this week. Last month, American Airlines said it had approximately 20,000 excess employees on its books.
WARN Act notices to go out to AA employees this week
In a brief report published today, Reuters says notices warning of potential furloughs will be sent to employees "later this week." In conjunction, American Airlines is actively encouraging employees to consider early retirement packages already on the table. Before the travel downturn, American Airlines had over 133,000 employees.
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Unions representing mechanics and fleet service workers at American Airlines said its members will soon be sent WARN Act notices. These notices, officially known as Worker Adjustment and Retraining Notifications, are a legal requirement and contain information about potential furloughs.
Just how many jobs will go depends on several factors. Like other US airlines, American Airlines has been actively promoting its voluntary redundancy packages. How many jobs go on an involuntary basis depends on how many jobs go voluntarily.
American Airlines carrying thousands of excess employees
But American Airlines CEO Doug Parker did say in an employee town hall meeting in June that the airline will be carrying 20 - 30% more employees than it needs by October.
"... Looking at October 1st, assuming conditions is what we think it’s going to be, which is pretty similar to today, we think we would have on that date something on the order of 20 – 30% more people than we need to fly that airline through the fall and winter months.”
Specifically, Mr Parker suggested American Airlines would have 10 - 20% excess pilots and 20 – 30% excess flight attendants. However, American Airlines is looking further forward than October.
At the town hall meeting, while citing October figures, the number of involuntary furloughs and voluntary redundancies will likely be based on projected demand in July 2021.
Doug Parker expects demand to rebound further by then but still not returning to 2019 levels. But, as 2020 rolls on, airline executives are learning that predicting demand is a fraught business. External shocks continue to buffer the industry.
American Airlines wants to keep as many pilots as possible
However, it appears that not all employees are created equal. American Airlinesis inclined to hold on to as many specialized and highly employees as it can. Pilots are a more prized resource than flight attendants, engineers more valuable than check-in employees.
"Pilots require so much training. Flight attendants can move across different aircraft, but there’s still a training requirement. It makes zero sense to furlough a pilot in October if you’re going to need that pilot again in July,” said Mr Parker.
American Airlines isn't alone. Competitor United Airlines is sending out WARN Act notices to 36,000 of its employees this week. In United's firing line are flight attendants and customer service employees.
Delta Air Lines is warning over 2,500 pilots about potential involuntary furloughs. But it wants thousands more to accept voluntary redundancy packages. Southwest Airlines has resisted permanently furloughing staff. Now, it too is now warning that unless passenger numbers triple by the end of 2020, furloughs may be inevitable.
Meanwhile, as American Airlines moves to rightsize itself to meet the evolving demand for flying, thousands of employees wait nervously to hear about their future.