American Airlines Tells Employees: Furloughs Are Inevitable – View from the Wing

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Major U.S. airlines have tried to shrink their workforces to reflect the new reality of reduced airline demand, offering leaves and early retirement packages to employees in hopes of avoiding furloughs.

On Wednesday American Airlines President Robert Isom told a group of flight attendants, however, that the airline is “so fortunate the country and the government looked upon” it as important to the country – and pumped in subsidies as part of the CARES Act. However as the airline “come[s] to the end of the payroll support program at the end of September” and is allowed to let go of employees, “the next step is sizing the airline to exist at [the new level of passenger] demand.”

Fundamentally the reason the airline faces “the horrible situation of being confronted with furloughs” is that fewer people are traveling, and that supports fewer flights and fewer jobs – so that furloughs “at this point in time seem inevitable.”

“Without additional help from the government furloughs are inevitable,” according to Isom. That’s why American Airlines and labor unions are asking for a ‘straight extension’ of payroll money from the government for 6 more months. Even though,

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  • the airline has previously said that payroll grants covered around 75% of payroll expense
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  • they’re only looking to furlough around 30% of employees
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  • they’re reducing their payroll with leaves and early retirements so shouldn’t require nearly as much support

And most of all, even though airlines like Southwest say they don’t even need to furlough anyone this year and CEO Doug Parker told employees previously they wouldn’t be lobbying for more money because the airline can survive without it, they still want six months of full support to subsidize payroll – including for people who will be continuing to work anyway.