• By The Financial District

AMERICAN AIRLINES TO FURLOUGH 20K JOBS

American Airlines told employees on Wednesday that it could furlough as many as 20,000 people starting Oct. 1, after federal stimulus funds expire, according to a report from The New York Times.

“We know American will be smaller going forward and we must right-size all aspects of our airline to adjust to that new reality,” the airline’s chief executive, Doug Parker, and president, Robert Isom, said in a letter to employees. “Although this is a day none of us wanted to see, we have created new, generous programs intended to help offset as many front line furloughs as possible.”


Despite planning to send out legally required warnings to 25,000 employees, American said it expects to be overstaffed by about 20,000 workers this fall. The warnings, which the airline started sending on Wednesday, will go to nearly 10,000 flight attendants, 3,200 maintenance workers, 2,900 passenger service employees and 2,500 pilots, among others. Last week, United Airlines said it could furlough as many as 36,000 workers in the fall.


Both airlines hope to reduce those numbers by encouraging employees to retire early or accept buyout packages. American said it would offer some employees the option to take leave from the company for up to two years while receiving part of their salary and retaining health and travel benefits.


Passenger airlines were able to avoid draconian cuts after Congress passed the CARES Act in March, which set aside $25 billion to help the companies pay workers, provided they refrain from substantial cuts through Sept. 30. American was the largest recipient, receiving $5.8 billion in mostly grants and some loans. Delta Air Lines received $5.4 billion and United received $5 billion.


The unions that represent pilots, flights attendants and other workers at American and other airlines have voiced support for extending that funding through March 31. In the letter on Wednesday, American echoed that support.


Delta Air Lines and Southwest Airlines have warned that they may also make similar cuts this fall.