American Airlines AAL -2.23% Group Inc. said it would shed 19,000 workers by Oct. 1 as the carrier prepares to downsize to cope with the coronavirus pandemic’s blow to travel demand, which isn’t expected to rebound for years.
American’s cuts are less than the 25,000 potential job losses it warned were possible last month. But together with retirements and temporary leaves of absence, the reductions will make the carrier about 30% smaller than it was in March and are the clearest sign yet of the devastation coming for the airline industry as the summer travel season winds down and government funds run out.
The reductions include 17,500 furloughs of pilots, flight attendants, mechanics and others, as well as 1,500 cuts from management and administrative ranks. They cover American Airlines itself as well as the two regional airlines it owns.
“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 Chief Executive Doug Parker and President Robert Isom wrote in a message to employees Tuesday. American plans to fly less than half its typical schedule in the fourth quarter.
Airlines received $25 billion in federal aid to pay workers through the end of September to avoid mass layoffs. But travel demand has stalled at around 30% of last year’s levels. Executives believe it will take years—and likely a Covid-19 vaccine—for it to fully recover.