American Airlines Calls to Extend Billions in Aid Through 2021

American Airlines is backing calls to extend billions in federal aid through next March as it preps its 100,000-plus workforce for more furloughs and layoffs.
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American Airlines  (AAL) - Get Report is backing calls among its ranks and its peers in the pandemic-stricken airline industry to extend billions in federal aid through next March as it preps its 100,000-plus workforce for more furloughs and layoffs.

American notified some 25,000 of its employees this week that they are at risk of losing their jobs later this year as the carrier continues to adjust to the global collapse in passenger air travel while facing a deadline of repaying some $32 billion in government aid meant to keep thousands of airline industry workers on the payroll.

However, with that deadline looming for all U.S. carriers that received aid as well as a resurgence in U.S. coronavirus cases that has stalled an already tenuous economic recovery, some of American Airlines’ top executives are backing efforts to extend that federal aid through March 2021, even as they warn of looming furloughs and layoffs.

“We hate taking this step, as we know the impact it has on our hardworking team members,” American CEO Doug Parker and President Robert Isom said in a letter to employees on Wednesday. “We hope to reduce the actual number of furloughs significantly through enhanced leave and early-out programs.”

A resurgence of Covid-19 cases and related travel restrictions are crimping an already tenuous recovery in demand for flights, affecting all carriers. United Airlines  (UAL) - Get Report and Delta Air Lines  (DAL) - Get Report have also warned that they are facing additional steep losses, and may have to make tough staffing decisions in the near future. 

Delta on Tuesday reported a record second-quarter adjusted loss of $2.8 billion - and a 94% plunge in consumer traffic. As a result, the airline said it will add no more than 500 flights back in August, half the number it originally planned.

Southwest Airlines  (LUV) - Get Report also warned this week that it could be forced into its first-ever involuntary furloughs if passenger numbers don’t increase dramatically by year-end.

Shares of American were down 6.66% at $12.54 in trading on Thursday.