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American Airlines | Market Update

Updated: Jan 29



Summary


  • American Airlines is cutting nearly 20,000 employees in October

  • Airline expects 4th quarter to be down 50% than last year at the same time

  • Airlines are asking for an extension of federal payroll to help avoid furloughs


American Airlines will lay off 19,000 employees in October after the federal payroll aid stops. The pandemic has caused serious declines in travels and this isn’t expected to improve any time soon.


American Airlines who employees 140,000 people in exchange for receiving federal aid is prohibited in laying off workers until September 30. The federal government was hoping by October things would recover quickly enough to avoid massive lay offs. However, travelers are still suppressed at home with the lingering pandemic. American Airlines said estimated travel in the 4th quarter is to be 50% of 2019 4Q levels. They are also experiencing a 75% drop in international travel.


The airline is expecting to have 40,000 less employees than they had in March. These layoffs include union workers, flight attendants, pilots, mechanics, and management jobs.


Delta is also experiencing large deficits and announced that it plans to lay off almost 2,000 pilots unless it renegotiates its agreement with the union.


Southwest Airlines said it doesn’t expect to have any layoffs in 2020 because more than a quarter of its workforce signed up for voluntary leave or a buyout.


The extension of federal aids could provide the needed relief for the airlines and help prevent massive layoffs.


More than 12,500 people have opted to leave American permanently, while another 11,000 will be on leave in October.


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