CHICAGO: American Airlines said today it will cut 19,000 US jobs in October as the Covid-19 pandemic continues to weigh on air travel, unless the government extends aid for airline employee payrolls.
Airlines received US$25 billion (RM104.25 billion) in US government stimulus funds in March meant to cover payrolls and protect jobs through September. As the money runs out without a travel recovery in sight, airlines and unions have lobbied Washington for another US$25 billion, but talks have stalled.
Including voluntary exits and leaves, American's workforce will shrink to around 100,000 in October from the 140,000 it employed in March.
"In short, American's team will have at least 40,000 fewer people working Oct 1 than we had when we entered this pandemic," chief executive Doug Parker and president Robert Isom said in a memo to employees that was reviewed by Reuters.
The October job cuts comprise 17,500 furloughs of union workers – including 1,600 pilots and 8,100 flight attendants – and 1,500 management positions.
Based on current demand levels, American now plans to fly less than 50% of its normal schedule in the fourth quarter, with international flying reduced to only a quarter of 2019 levels, Parker and Isom said in the memo.
In another development, Finnish national carrier Finnair announced plans today to cut 1,000 jobs, or 15% of its workforce, amid dire warnings about the economic impact of the coronavirus.
"A rapid turn for the better in the pandemic situation is unfortunately not in sight," chief executive Topi Manner said in a statement. "Our revenue has decreased considerably and that is why we simply must adjust our costs to our new size.”
The 1,000 job cuts at Finnair will not apply to cabin and flight deck crew, the airline said, although flying staff will remain on furlough "until further notice". The vast majority of its 6,700 employees are currently on temporary layoffs.
Alongside job cuts, the carrier will make other structural changes and today updated its savings target from €80 million (RM394 million) to €100 million.
Finnair, which is majority owned by the Finnish state, cut 90% of its flights on April 1 and issued a profit warning as coronavirus restrictions pounded international travel. The company has been particularly hard hit by the drop in long-haul traffic, with flights between Helsinki and Asia a key part of the group's growth strategy.
The carrier sold €500 million worth of shares in June to boost liquidity.
Finland's government further tightened coronavirus travel restrictions last week, banning tourists from all but a handful of EU member states.
In Stockholm, Scandinavian rival SAS posted a sharp loss in its third quarter profit meanwhile, as cost-cutting measures including around 4,800 job cuts failed to offset the huge drop in airline traffic.
SAS said that its third quarter that runs from May through July, ended with a net loss of 2.37 billion kronor (RM1.13 billion), more than reversing the profit of 1.2 billion kronor earned during the same period a year earlier.
"Despite our immediate measures to reduce costs to adapt to a new reality, the cost reduction of 67% did not offset the sharp decline in revenue" that was triggered by the coronavirus pandemic, a statement said.
SAS revenues plunged by more than 80% to 2.5 billion kronor, and the number of passengers was down by 86%.
The airline furloughed around 90% of its staff in mid-March, and said in April that around 40% of its positions, or 4,800 jobs, would be eliminated. – Reuters, AFP
source https://www.thesundaily.my/business/american-airlines-to-cut-19000-jobs-in-october-unless-government-extends-payroll-aid-II3648497
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