American Airlines Inc. warned some 13,000 American workers on Wednesday that they could be on leave in the coming weeks as the pandemic continues to shrink travel and run out of government money.
In a letter to employees, American Airlines AAL,
also criticized the speed of distribution of the COVID-19 vaccine, saying it expects the lack of demand to continue over the summer.
Any impact on the jobs will take effect on or after April 1, when government payroll expires, the airline said in the letter Wednesday.
Nearly five weeks into 2021, “we will be in a situation similar to much of 2020,” Chief Executive Doug Parker and President Robert Isom told employees.
With the extension of the Payroll Support Program late last year, the company fully believed that we would be looking at a summer schedule where we would fly all of our planes and need the full strength of our team. Unfortunately, that is no longer the case ”, they said.
“The vaccine is not being distributed as quickly as we thought, and new restrictions on international travel requiring customers to have a negative COVID-19 test have dampened demand,” they said.
American flies at least 45% less in the first quarter than in the first quarter of 2019, and based on the current outlook, it won’t fly all of its planes in the summer as planned, it said.
The leave notices, which are required by law in certain areas, go out Friday, the company said. They “don’t necessarily equate to leave,” he said. The company will work with union leaders “to do everything it can to minimize the impact on the workforce,” it said.
Unions are urging Congress to extend aid until Sept. 30, and the company will support that effort, it said.
American will also open an early retirement program, with some incentives depending on the number of years of service, and a leave program, he said.
American Airlines shares are down 35% in the past 12 months, as opposed to a gain of about 18% for the S&P 500 index SPX,