Over the last few weeks, I’ve written about the sad state of affairs of the travel industry. After Covid-19 wrecked the economy, customer demand came to a standstill. We saw a massive wave of airline bankruptcies. This was followed by car rental companies also filing for Chapter 11. Now, after United, AA and Delta are also on the verge of announcing major layoffs.
AA & Delta Layoffs
As per this CNN Business report, AA and Delta plan to carry out these job cuts by instituting voluntary exit programs and layoffs. AA’s letter to its employees laid it out. You can read the full article on CNN Business here.
In a letter addressed to employees, American said Wednesday that it needs to eliminate about 30% of its management and support staff because of its transition into a smaller airline. In addition to the staffing cuts, the Fort Worth-based company said involuntary separation decisions will be communicated in July, and those staff members will be on payroll until September 30.
Similarly, Delta also sent out a memo to its employees on the same lines.
Delta announced a similar initiative Thursday, telling employees in a memo obtained by CNN that a “smaller Delta unfortunately means fewer people will be required.” The airline has drastically cut its schedule in the spring, but is restoring some routes in June. Still, its second-quarter schedule is 85% smaller than the same period last year.
The Pundit’s Mantra
Customer demand is currently minimal. The memos demonstrate that the airlines have realized the need to downsize. In short, they will operate fewer planes and routes. Consequently, they’ll need fewer employees to do it.
United already announced their intent to start layoffs a few weeks back. As the big three downsize, we’re seeing a moment of reckoning for the US airline industry. However, the layoffs will commence in October. As per the CARES act, US airlines cannot enforce layoffs until the end of September.
These layoffs are bound to further escalate a pertinent but passionate discussion about corporate bailouts and income inequality. While the present scenario looks grim, one can only hope that better days lie ahead for travel industry and its employees.
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