American Airlines is poised to cut 30 percent of its management and support staff and reduce its fleet by 100 planes over the next year, the company’s executive vice president said in a letter to employees Wednesday.
The cuts come after the airline industry has been stressed by the coronavirus pandemic, as travel restrictions and social distancing guidelines greatly reduced the number of international and domestic flights over the last three months. LATAM Airlines, the largest carrier in South America, filed for Chapter 11 bankruptcy protections on Tuesday. Ten U.S. airlines received $25 billion in grants from the government as part of the Cares Act in April.
American Airlines had already reduced its carrying capacity and nearly 39,000 employees had opted to take voluntarily leave or retire early already, executive vice president Elise Eberwein said in the letter, which was reviewed by The Washington Post.
In addition to the job cuts, the company is requiring management and support staff to take half of their unused vacation days by Sept. 30 and suspended its vacation rollover policy. Eberwein asked willing employees to volunteer to leave their jobs by June 10. If the company does not have enough voluntary departures to reach a 30 percent cut, then layoffs will begin, she said.
The company will pay terminated employees through Sept. 30, Eberwein said. Their health insurance coverage will carry over for 18 months and they will also receive a travel benefit from the company.
“There is no doubt this is going to be a painful time for all, especially for our departing colleagues, who have given American Airlines their all and are leaving through no fault of their own,” Eberwein wrote in the letter. “They deserve our respect and gratitude.”