International and domestic airlines were first to get hit by the COVID-19 pandemic as the current pandemic had practically stalled transportation options. Even though vaccination attempts are taking place on one end, the economy won’t be back to normalcy for another few months. Making the situation tougher for thousands of workers in the industry, American Airlines has announced that it would be sending furlough notices to more than 13,000 employees in the coming weeks. So far, the airline has been taking care of the payments using federal payroll aid. However, the aid will expire next month, making it impossible for the airline to keep paying its employees.
It is worth noting that American Airlines isn’t the first company to send furlough notices. For instance, in the last week, we had seen United Airlines sending furlough warnings to more than 14,000 employees. One clear thing is that the federal payroll support programs from Congress are not enough to take care of the expenses that the airlines have to control. Since March 2020, Congress has provided multiple levels of payroll support schemes to airlines in the country. The core objective was that the airlines should not have to sack employees for sustenance. A total of $25 billion was given to the airlines in March 2020, and another $15 billion was to make airlines recall the employees it had furloughed earlier. It seems the end of the assistant programs will push both American Airlines and United Airlines to square one.
In the case of furlough notices sent by American Airlines, they will impact employees in multiple sectors. For instance, 4245 flight attendants, 1850 pilots, 1420 maintenance employees, and 100 dispatchers would be affected by the notices, among others. It should be noted that these notices are prior warnings to the loss of jobs. The employees may or may not lose their jobs in the end, but the employer has to send the notices at least 60 days before sacking. Of course, the airlines would be expecting further support from Congress, as has been the demand by employees unions. Unions are now asking Congress to offer another $15 billion in payroll support so that airlines can avoid sacking employees until September.
In addition to the furlough notices, American Airlines is offering a variety of packages to employees willing to accept voluntary retirement. Those who have been a part of the workgroup for more than a decade can apply for these programs, including a retirement health reimbursement package worth $150,000. Partial-pay options and leave of absence options are also being used by the airlines to keep the financial spending under control. At the same time, employee unions have criticized American Airlines for its lack of strategy in financial management and the optimization of flying schedules. While that may have been the case, the only solution AA has now is the extended aid from Congress.