American tries to avoid the ‘old airline playbook’ on furloughs even as it shrinks

Jun 11, 2020

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American Airlines — along with nearly every other carrier in the world these days — is getting smaller as a result of the coronavirus.

Schedules have been slashed and carriers around the world expect to be smaller in 2021 than they were at the beginning of this year.

American is among those, but CEO Doug Parker said the company is doing its best to avoid involuntary furloughs even as it shrinks its workforce.

“It’s easy to default to the old airline playbook and just furlough people and bring them back as needed. We’d like to avoid that, ” he said during American’s annual shareholders meeting on Wednesday.

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Parker’s comments come as American and other U.S. airlines have slashed schedules as demand disappeared during the coronavirus pandemic. A slight recovery appears to have taken hold as summer begins, but traffic is still down nearly 80% year-over-year. Some carriers have warned that they expect to emerge from the crisis 20% to 30% smaller than it began.

For American, Parker said he’s hopeful the airline will be able to work with its unions and employees to come up with less painful ways to reduce the company’s ranks.

Related: America’s new busiest airport is Dallas/Fort Worth, at least for now.

“It’s a stretch goal, it’s not a certainty,” he said about the effort to avoid involuntary furloughs. He offered few specifics, but said American is “committed to the goal.”

Airlines — including American — that received federal assistance under the CARES Act are barred from enacting layoffs and furloughs through September as a condition of that aid. The requirement comes even as demand for travel dropped an unprecedented 96% in April, according to data from the federal Bureau of Transportation Statistics.

(Image courtesy of the Bureau of Transportation Statistics)
(Image courtesy of the Bureau of Transportation Statistics)

U.S. airlines have responded with a significant reduction in flying and have tried to scale back staffing by offering incentives to entice employees to leave voluntarily.  At American, Parker said that about 39,000 workers had already accepted offers for early retirement or voluntary leave.

He said the airline is in talks with its unions and other employee working groups to expand those measures. Though few details were presented during Wednesday’s call, Parker said the company hopes to adopt such measures to avoid involuntary furloughs later this year.

More: Airlines walk a fine line with staff cuts after taking coronavirus aid.

The unions that represent American’s pilots and flight attendants acknowledged that the airline seems committed to avoiding furloughs, and said that discussions about how to do that are ongoing, even as the exact contours of the recovery remain uncertain.

However, the picture is not all bad for American, Parker said, noting that the company’s planes are slowly starting to fill up again. The carrier is flying an average 127,000 passengers a day so far in June, up from just 32,000 in April.

And while American continues to offer a reduced schedule, the flights that are still flying are increasingly full. Parker said American is filling about 58% of its seats now, up from 47% in May and from a dreary 15% in April at the depth of the crisis.

Related: TSA screening numbers continue to rebound.

Still, Parker acknowledged it’s unclear how even the recovery will be.

“It’s really difficult still to know how much we’ll be flying in the fall and into next summer,” he said. That’s why the possibility of furloughs still remains on the table for now.

This story, which was originally published on June 10, 2020, has been updated on June 11, 2020, to include comments from some of the unions at American Airlines.

Brian Kim contributed reporting.

Featured photo by ANDREW CABALLERO-REYNOLDS/AFP via Getty Images.

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