American Airlines Backs Union on Fed Relief to Avoid 13,000 Furloughs

American Airlines' leadership said it backs union efforts to extend federal funding for airline workers through September 30. Without additional payroll support, the Fort-Worth, Texas-based airline said it could furlough or lay off up to 13,000 employees.

"We are fully behind our union leaders' efforts to fight for an extension [of the Payroll Support Program], and we will lend our time and energy to support this effort in every way we can," CEO Doug Parker and President Robert Isom wrote in a letter to employees.

Absent that funding, the carrier will send out WARN Act notices — required by federal law before a mass lay-off or furlough — to 13,000 employees on Friday, Parker and Isom said. The carrier additionally is offering a new round of early-retirement and voluntary leaves-of-absence programs to reduce headcount.

Last week, the Association of Professional Flight Attendants, which represents American's cabin crew, joined several other unions to call on Congress to extend the Payroll Support Program. The union said layoffs could be imminent, as American management had said the carrier is overstaffed.

The union added, however, that it was not interested in renegotiating its contracts. "To be clear, American has a demand problem, not a labor cost problem, and APFA is not interested in offering concessions,” union President Julie Hedrick said in a memo to members.

Congress last year gave the airline industry $25 billion through the CARES Act stimulus program, with the proviso that carriers taking the funding had to maintain staffing at March 2020 levels. That funding expired on September 30, and airlines furloughed tens of thousands of employees. American alone furloughed 19,000 workers.

But the industry was in the process of recalling those workers from December, after Congress extended the program with an additional $17 billion through March. But demand has not recovered enough for most airlines to retain their full workforce.

"The vaccine is not being distributed as quickly as any of us believed, and new restrictions on international travel that require customers to have a negative Covid-19 test have dampened demand," Parker and Isom said.

President Joseph Biden and Congressional leaders currently are hammering out a new $1.9 trillion federal coronavirus stimulus package. It remains unclear if additional airline payroll support will be part of the bill, or if there is political appetite to extend the support.