American Airlines Inc. will send notices beginning Friday to around 13,000 U.S.- based employees regarding possible furloughs, according to a filing with the U.S. Securities and Exchange Commission.
In a letter to employees, the struggling airline said it is forced to take action due to the expiration of the U.S. Government’s Payroll Support Program or PSP on April 1 amid the weak travel demand as the pandemic crisis continues. Any job impact will take effect on or after April 1.
The company said it supports union partners who are urging Congress for an extension of the PSP through September 30 of this year.
Chief Executive Doug Parker and President Robert Isom said in a memo to employees, “We are nearly five weeks into 2021, and unfortunately, we find ourselves in a situation similar to much of 2020. As we closed out last year with the successful extension of the Payroll Support Program, we fully believed that we would be looking at a summer schedule where we’d fly all of our airplanes and need the full strength of our team. Regrettably, that is no longer the case.”
American expects to fly at least 45 percent less in the first quarter compared to that of last year. Based on current demand outlook, the company will not fly all of its aircraft this summer as planned, and will have more team members than the schedule requires after federal payroll support expires on April 1.
The company said the travel demand is continuing to be hurt by slower-than-expected vaccine distribution and new restrictions on international travel that require customers to have a negative COVID-19 test.
American Airlines said it will send Worker Adjustment and Retraining Notification or WARN notices to these employees, as required by law in advance of potential furloughs in certain locations.
As per the filing, the furlough notices will be given to 1,850 pilots; 4,245 flight attendants; 3,145 fleet service workers; 1,420 maintenance workers; 1,205 in passenger service; 100 dispatchers; and 40 Flight Crew Training instructors.
The company also announced a voluntary early out program and a long-term voluntary leave of absence program for frontline, U.S.-based team members, excluding pilots.
Rival United Airlines Holdings Inc. has recently issued furlough warnings to its 14,000 employees.
Both companies had furloughed thousands of their workers last year when the first round of federal payroll support ended on October 1.
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