The workforce of American Airlines will be reduced by 40,000, which will include about 19,000 involuntary cuts, in October. Although the Airlines received aid from the US government in the form of $25 billion about five months back, it has barely managed to protect jobs and pay the salaries of the employees. With demand for travel yet to pick up, there seems to be no hope in sight. The Airline has requested the US government for another round of assistance, of about $25 billion, but no agreement has been reached on the issue.
The Company had hoped that normalcy would begin to return in by September, but recovery seems far away. The shares of the Airline also plummeted to 2.7 per cent. Given the current demand, the Airline plans to fly less than half of its usual schedule, as demand is hardly a quarter of what it was last year. Flights to 15 small cities in the US will be suspended if additional government aid is not received.
As per the planned job cuts, about 17,500 union workers will go on furlough, which includes 1,600 pilots and 8,100 flight attendants, as well as 1,500 managers.
Other airlines are also considering downsizing to tide over the current crisis. United Airlines is expected to cut about 36,000 jobs but the decision is yet to be finalised. Delta recently furloughed almost 2,000 pilots but the numbers may decrease if the pilots agree to take a pay cut.
