American Airlines cuts 19,000 jobs and plans to fly 50% less than before.
American Airlines (NASDAQ: AAL) will cut 19,000 jobs in October, bringing the total number of people leaving the company to about 40,000.
The shares are down nearly 4% this Tuesday. Delta Air Lines Inc (NYSE: NYSE: DAL) down 1% and United Airlines Holdings Inc (NASDAQ: UAL) down 4%.
The cuts are equivalent to a 28% reduction from the March US employment level of 140,000, according to Forbes.
The 19,000 positions will be involuntary layoffs or separations on October 1, the day after the emergency funding for the CARES Act expires, although hope remains that Congress will expand the payroll support program, which both parties endorse.
In addition to the 19,000 involuntary layoffs on October 1, some 12,500 employees have retired or accepted early retirement programs, the airline said, while another 11,000 have offered to take leave of absence in October.
“Based on current demand levels, we at American now plan to fly 50% less than our airline is used to in the fourth quarter, and we believe long haul international flights will be particularly reduced to just 25% from 2019 levels, “CEO Doug Parker wrote in a letter to employees Tuesday. The cuts are most profound for crews involved in international service due to disproportionate declines in international flights.