Although the airlines are starting to see a slow return to normalcy – with more travelers taking to the air in recent weeks than the mid-April lows – the damage from the COVID-19 emergency and necessary stay-at-home orders have already made their impact.
Americans Airlines sent out a letter to all employees recently announcing their plans for a reduction in staff – both at the management level and for support staff – as they plan to become a smaller carrier with fewer routes in the coming months.
“Although our pre-pandemic liquidity, the significant financial assistance provided by the government, and the cash we’ve raised in the capital markets provide a foundation for stability, we need to reduce our cost structure, including our most significant expense — the cost of compensation and benefits,” Elise Eberwein, American’s executive vice president of people and global engagement, said in the staff note as reported by CNBC.
Many American Airlines employees have already elected to take voluntary leave or early retirement. Those that have opted or will volunteer for this before the June 10th deadline will receive a third of their pay for the remainder of 2020 and flight privileges for five years.
But this doesn’t seem to be enough. And those employees that will be laid off after October 1st – earlier layoffs and furloughs cannot take place because the company accepted aid through the CARES Act – won’t see the same benefits as they are not expected to receive a severance package at all.
“We have already taken steps to prepare for this new reality, with nearly 39,000 team members electing to take a voluntary leave or early retirement,” Eberwein wrote as reported by Travel Weekly. “Fleet retirement accelerations are underway, and we will fly roughly 100 fewer aircraft next summer — mostly widebodies — than we had originally planned. Additionally, running a smaller airline means we will need a management and support staff team that is roughly 30% leaner.”
And while we are starting to see some recovery from the recent pandemic, it’s obvious that airlines and others in the travel industry are still suffering from the unparalleled side effects of this deadly virus.
