American Airlines warns 13,000 employees of furloughs as COVID pandemic pain persists
American Airlines have warned that 13,000 workers could be laid off as travel demand remains stagnating and more government COVID-19 aid is uncertain.
The Texas-based company said on Wednesday that the employees are at risk of furlough when a US aid package for airline workers expires on April 1.
Airlines’s Chief Executive Doug Parker and President Robert Isom said, “We are nearly five weeks into 2021, and unfortunately, we find ourselves in a situation similar to much of 2020.”
They blamed slow vaccine rollouts in the US and new international travel restrictions for the dampening demand.
"The vaccine is not being distributed as quickly as any of us believed, and new restrictions on international travel that require customers to have a negative COVID-19 test have dampened demand," they noted.
American's executives said in a letter to employees that the airline expects to fly at least 45 percent less in the first quarter, extending the industry slump as expectations for a travel recovery are delayed due to the slow rollout of coronavirus vaccines.
Fort Worth, Texas-based American said the company will not fly all of its aircraft this summer as planned.
American furloughed 19,000 workers in October when a previous round of government payroll support expired, but recalled them in December after a fresh $15 billion for the industry through March.
Aviation unions are already pushing for another $15 billion in US payroll assistance to protect jobs through the summer.
United Airlines has sent fresh furlough warnings to 14,000 employees, while Delta Air Lines Inc and Southwest Airlines Co initiated voluntary leave programs to avert layoffs.
American Airlines also plans to establish new programs to encourage early retirement or voluntary furloughs.
US President Joe Biden has proposed a $1.9 trillion COVID-19 economic relief package, currently being discussed in Congress.
Hard hit by the coronavirus pandemic, American Airlines saw its revenue decrease by 62 percent in 2020, and reported an annual loss of $8.9 billion.
In a quarterly earnings report out last week, the US carrier warned it expected revenue in the current quarter to fall 60 to 65 percent compared to the same period last year.
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