American Airlines Has 20,000 Employees It Won’t Need in the Fall
On Thursday, American Airlines informed staff that 20,000 employees would not be needed for the reduced fall schedule, according to CNBC.
Demand in the airline industry has been decimated by the coronavirus pandemic. American is encouraging employees to accept buyout offers or utilize early retirement options so that the airline can avoid layoffs.
The $25 billion in government payroll support US airlines were given prevents them from laying off or cutting the pay of staff through September 30. US airlines have been bolstering their liquidity stores and cutting costs.
“We currently anticipate having 20 to 30% — or more than 20,000 — more team members on payroll than we need to operate our schedule this fall,” CEO Doug Parker and President Robert Isom said. “To be clear, this doesn’t mean 20,000 of our team members will be furloughed in October, it simply means we still have to work to do to right-size our team for the airline we operate.”
In April, American had $11 million in cash. In May, the company increased that amount to $358 million and more than $1 billion in June. “While that improvement is encouraging, it’s compared to an average of $4.2 billion each month during the same period in 2019, so we have a ways to go,” Parker and Isom said.
Furthermore, the company was able to reduce its cash loss per day of $100 million in April, down to $35 million a day by the end of June. American expects travel demand to stay low through 2020.