• By The Financial District


American Airlines said on Tuesday its workforce will shrink by 40,000, including 19,000 involuntary cuts, in October as the COVID-19 pandemic continues to weigh on air travel, unless the government extends aid for airline employee payrolls.

Airlines received $25 billion in US government stimulus funds in March meant to cover payrolls and protect jobs through September. As the money runs out without a travel recovery in sight, airlines and unions have lobbied Washington for another $25 billion, but talks have stalled as Congress has struggled to reach agreement on a broader coronavirus assistance package, Tracy Rucinski reported for Reuters. Shares in American, which had 140,000 employees before the pandemic, fell 2.7%.

In a memo to employees, Chief Executive Doug Parker and President Robert Isom said the first relief bill had assumed the virus would be under control and demand recovered by Sept. 30. “That is obviously not the case,” they said.

Texas-based American’s announcement comes in the midst of the four-day Republican National Convention, where President Donald Trump is trying to regain momentum against the backdrop of a pandemic that has killed over 175,000 Americans and produced a recession that has resulted in the loss of millions of jobs. Airlines have argued that the industry is essential to a quick economic recovery. American’s planned job cuts comprise 17,500 furloughs of union workers -including 1,600 pilots and 8,100 flight attendants - and 1,500 management positions. They are below the 25,000 warning on possible job cuts American sent last month thanks to early retirements and leaves.

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