26 Aug 2020

American Airlines cuts 19,000 jobs amid travel slump

9:52 am on 26 August 2020

American Airlines says it will cut 19,000 jobs in October when a government wage support scheme extended to airlines during the pandemic comes to an end.

American Airlines Airbus A330-200 landing at El Prat Airport in Barcelona, Spain.

Photo: 123RF

The world's biggest airline said the cuts, on top of voluntary departures and leave, would leave its workforce 30 percent smaller than it was in March.

Other carriers have warned of similarly large cuts amid a slump in air travel.

United last month said as many as 36,000 jobs were at risk.

Germany's Lufthansa has warned it may cut 22,000 positions, while British Airways is slashing 12,000 jobs.

The reductions come amid warnings that the impact of the pandemic will cause airline losses of more than $US84 billion ($NZ128b) globally this year.

In the US, the terms of a $US25b government bailout barred airlines from making significant job cuts before 30 September. While airlines have called for further support, talks in Washington about an aid package collapsed this month without a deal.

American Airlines had received $US5.8b from the payroll aid programme. It recently announced plans to suspend service to 15 smaller airports in the US due to low travel demand.

"We must prepare for the possibility that our nation's leadership will not be able to find a way to further support aviation professionals and the service we provide, especially to smaller communities," chief executive Doug Parker and president Robert Isom said in a message to staff.

In the letter, executives said they expected the airline to be flying at about 50 percent capacity in the final three months of 2020. International flights are expected to be reduced to 25 percent of 2019 levels.

The airline said it expected fewer than 100,000 people to be working in October, down from 140,000 at the beginning of March.

In addition to the 19,000 cuts, about 12,500 people have voluntarily left the airline since March. Another 11,000 will be on voluntary leave in October.


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