American Airlines said Tuesday it will cut more than 40,000 jobs nationwide in October, including 19,000 through furloughs and layoffs, as it struggles with a sharp downturn in travel because of the pandemic.
American employs approximately 13,500 employees in Miami-Dade with an annual payroll that exceeded $1.8 billion as of October 2019, according to an American Airlines news release. It boasted being the county’s third-largest private employer last year when the company celebrated 30 years as a hub at Miami International Airport. In 1989 American operated just 19 flights a day to six cities from MIA. Thirty years later, in a pre-pandemic environment, the airline reported operating more than 350 flights per day to nearly 130 destinations. American also handled nearly 380 million pounds of freight from its Miami cargo operation.
At that time, Mayor Carlos Gimenez said, “American Airlines has a significant economic impact on our community. Its Miami hub helps drive South Florida’s economy, and its robust schedule is critical to our community’s economic development.”
More than 162,000 additional jobs created through businesses that support MIA operations means that American’s Miami hub contributes more than $21 billion annually to the South Florida economy.
American executives said the furloughs can only be avoided if the federal government gives airlines another $25 billion to help them cover labor costs for six more months.
Otherwise, shrinking overhead even more will be necessary, to coincide with the company’s announced plan to fly less than half its usual schedule – and only one-fourth of its lucrative international service.
The airline said 23,500 employees across the country have accepted buyouts, retired early or taken long-term leaves of absence, but that was not enough to avoid involuntary cuts.
The furloughs of union workers and layoffs of management staff fall heaviest on flight attendants, with 8,100 being terminated in October. American began the year with about 140,000 employees but expects fewer than 100,000 to remain in October.
Representatives of American’s labor unions reacted with alarm but not much surprise. There is no word yet on exactly how many employees based in Miami-Dade will be affected.
“Today is a devastating day for the hardworking, frontline employees at American Airlines,” said Julie Hedrick, president of the Association of Professional Flight Attendants.
“We knew this day was coming” without more federal money for airline payrolls, said Dennis Tajer, a spokesman for the Allied Pilots Association. “We see the dark consequences. “
U.S. air travel plunged 95% by April, a few weeks after the first significant coronavirus outbreaks in the country. Passenger traffic has recovered slightly since then but remains down 70% from a year ago, and carriers say they need fewer workers.
Delta Air Lines has already announced that it will furlough 1,941 pilots in October unless it reaches a cost-cutting deal with the pilots’ union.
In March, passenger airlines got $25 billion from the government to save jobs for six months, and American was the biggest beneficiary, receiving $5.8 billion. The money, and an accompanying ban on furloughs, expires after Sept. 30, although airlines and their labor unions are lobbying Congress for another $25 billion and a six-month reprieve from job cuts.
When the federal relief was approved, “it was assumed that by Sept. 30, the virus would be under control and demand for air travel would have returned. That is obviously not the case,” American CEO Doug Parker and President Robert Isom said in a letter to employees.
“The one possibility of avoiding these involuntary reductions on Oct. 1 is a clean extension” of the payroll relief, they said.
Airlines were the only industry to get special treatment in a $2.2 trillion virus-relief measure approved in March. There is broad support in Congress for extending airline aid, but it is stalled by a breakdown in negotiations between the White House and congressional Democrats over a new, large aid package.
American’s cuts include jobs at affiliates that operate American Eagle regional flights. The number of furloughs of union employees with rehiring rights and layoffs of management and support staff is less than the 25,000 who received warnings in July. American said they will be paid through September to comply with the terms of the federal aid.