American Airlines to cut 19,000 jobs in October
- 25 Aug 2020
American Airlines said on Tuesday it would eliminate 19,000 jobs in October as it struggles with a sharp downturn in travel because of the pandemic. Flight attendants will bear the heaviest cuts, with 8,100 losing their jobs.
The furloughs and management layoffs announced on Tuesday are in addition to 23,500 employees who accepted buyouts, retired early or took long-term leaves of absence. American began the year with about 140,000 employees but expects fewer than 100,000 to remain in October.
US air travel plunged 95% by April, a few weeks after the first significant coronavirus outbreaks in the United States. Passenger traffic has recovered slightly since then but remains down 70% from a year ago, and carriers say they need fewer workers.
American’s announcement comes one day after Delta Air Lines said it will furlough 1,941 pilots in October unless it reaches a cost-cutting deal with the pilots’ union.
In March, passenger airlines got $25 billion from the government to save jobs for six months, and American was the biggest beneficiary, receiving $5.8 billion. The money, and an accompanying ban on furloughs, expire after Sept. 30, although airlines and their labour unions are lobbying Congress for another $25 billion and a six-month reprieve from job cuts.
When the federal relief was approved, “it was assumed that by Sept. 30, the virus would be under control and demand for air travel would have returned. That is obviously not the case,” American CEO Doug Parker and President Robert Isom said in a letter to employees on Tuesday.
American plans to fly less than half its usual schedule - and only one-fourth of its lucrative international service - in the fourth quarter. The airline, based in Fort Worth, Texas, announced last week that it will pull out of 15 smaller US cities in October, a move that was seen as a warning shot to Washington that it should approve more money for airline payrolls.
“The one possibility of avoiding these involuntary reductions on Oct. 1 is a clean extension” of the payroll relief, Parker and Isom said in their letter to employees.
Airlines were the only industry to get special treatment in a $2.2 trillion virus-relief measure approved in March. There is broad support in Congress for extending that help, but it is stalled by a breakdown in negotiations between the White House and congressional Democrats over a new aid package.
Finnair to cut jobs: Finnish national carrier Finnair announced plans Tuesday to cut 1,000 jobs, or 15 per cent of its workforce, amid dire warnings about the economic impact of the coronavirus.
“A rapid turn for the better in the pandemic situation is unfortunately not in sight,” chief executive Topi Manner said in a statement. “Our revenue has decreased considerably and that is why we simply must adjust our costs to our new size,” Manner said.
Scandinavian rival SAS posted a sharp loss in its third quarter profit meanwhile, as cost-cutting measures including around 4,800 job cuts failed to offset the huge drop in airline traffic.
The 1,000 job cuts at Finnair will not apply to cabin and flight deck crew, the airline said, although flying staff will remain on furlough “until further notice”.
The vast majority of its 6,700 employees are currently on temporary layoffs.
Alongside job cuts, the carrier will make other structural changes and on Tuesday updated its savings target from 80 million euros ($94 million) to 100 million euros.
Finnair, which is majority owned by the Finnish state, cut 90 percent of its flights on April 1 and issued a profit warning as coronavirus restrictions pounded international travel. The company has been particularly hard hit by the drop in long-haul traffic, with flights between Helsinki and Asia a key part of the group’s growth strategy.
The carrier sold 500 million euros’ worth of shares in June to boost liquidity.
Finland’s government further tightened coronavirus travel restrictions last week, banning tourists from all but a handful of EU member states.
In Stockholm, SAS said that its third quarter that runs from May through July, ended with a net loss of 2.37 billion kronor (228 million euros, $270 million), more than reversing the profit of 1.2 billion kronor earned during the same period a year earlier.
“Despite our immediate measures to reduce costs to adapt to a new reality, the cost reduction of 67 percent did not offset the sharp decline in revenue” that was triggered by the coronavirus pandemic, a statement said.
Agencies
